Treasuries moved to the upside during trading on Friday in reaction to the latest U.S. economic data as well as continued weakness on Wall Street.
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 2.28 percent.
With the decrease on the day, the ten-year yield pulled back further off the three-month closing high set on Monday.
The strength among treasuries came after the Commerce Department released a report showing retail sales rose less than expected in the month of October.
The report said retail sales inched up by 0.1 percent in October, while revised data showed that sales were virtually unchanged in September. Economists had expected sales to climb by 0.3 percent.
Excluding a pullback in auto sales, retail sales rose by 0.2 percent in October following a revised 0.4 percent drop in September. Ex-auto sales were expected to increase by 0.4 percent.
A separate report released by the Labor Department showed an unexpected decrease in producer prices in the month of October.
The Labor Department said its producer price index for final demand fell by 0.4 percent in October after sliding by 0.5 percent in September. Economists had expected the index to rise by 0.2 percent.
Excluding food and energy prices, core producer prices still dropped by 0.3 percent, matching the decrease seen in the previous month. Core prices had been expected to inch up by 0.1 percent.
However, analysts largely said the two reports would not be enough to prevent the Federal Reserve from raising interest rates next month.
Treasuries also benefited from continued weakness among stocks, which extended a recent downtrend with another sharp drop. The weakness increased the appeal of safe havens such as bonds.
Another batch of U.S. economic data may drive trading next week, with traders likely to keep an eye on reports on consumer prices, industrial production, housing starts and regional manufacturing.
The minutes of the Fed’s most recent monetary policy meeting are also likely to attract attention amid concerns about the outlook for rates.
The material has been provided by InstaForex Company – www.instaforex.com