Following the notable pullback seen in the previous session, treasuries moved back to the upside during trading on Friday.
Bond prices moved higher in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.9 basis points to 2.183 percent.
With the decrease on the day, the ten-year yield pulled back off the one-month closing high set in the previous session.
The rebound by treasuries was partly due to traders looking for a safe haven amid uncertainty ahead of the Federal Reserve’s monetary policy meeting scheduled for next week.
The Fed is due to announce its latest policy decision next Thursday, but analysts are still split regarding whether the central bank will announce an increase in interest rates.
While upbeat economic data points to the first rate hike in nearly a decade, the recent stock market volatility and concerns about developing economies may keep the Fed on hold.
Ahead of the meeting, traders are likely to keep an eye on key reports on retail sales, industrial production, consumer prices, and housing starts, which could impact the Fed’s decision.
The Labor Department released a report this morning showing that producer prices came in flat in August, as a drop in energy prices was offset by a continued increase in service prices.
The producer price index for final demand was unchanged in August after rising by 0.2 percent in July. Economists had expected the index to edge down by 0.1 percent.
Excluding food and energy prices, the core producer price index rose by 0.3 percent in August, matching the increase seen in the previous month. Core prices had been expected to tick up by 0.1 percent.
Meanwhile, the University of Michigan also released a report showing a sharp drop in consumer sentiment in early September.
The report said the consumer sentiment index tumbled to 85.7 in September from the final August reading of 91.9. Economists had expected the index to show a much more modest decrease to 91.0.
The much steeper than expected drop by the index likely reflects concerns about the substantial volatility seen on Wall Street in recent weeks.
The material has been provided by InstaForex Company – www.instaforex.com