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Treasuries Finish Lackluster Session Modestly Higher

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Treasuries showed a lack of direction over the course of the trading session on Friday before ending the day modestly higher.

Bond prices fluctuated as the day progressed but managed to close in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 2.906 percent.

With the modest decrease on the day, the ten-year yield gave back ground after ending the previous session at its highest closing level since December 2018.

The lackluster performance by treasuries came amid ongoing concerns about the Federal Reserve aggressively tightening monetary policy.

In comments on Thursday, Fed Chair Jerome Powell said he saw merit in “front-end loading” policy moves and indicated a 50 basis point rate hike would be on the table at the central bank’s next meeting in early May.

CME Group’s FedWatch Tool currently indicates a 50 basis point rate hike at the May meeting is a near certainty.

Treasuries did not extend their recent downward trend, however, with a sell-off on Wall Street potentially increasing the safe haven appeal of bonds.

Reports on durable goods orders, new home sales, first quarter GDP and personal income and spending may attract attention next week as traders prepare for the next Fed meeting in early May.

Bond traders are also likely to keep an eye on the results of the Treasury Department’s auctions of two-year, five-year and seven-year notes.

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