Treasuries Extend Recent Strong Move To The Upside

Treasuries showed a notable move to the upside during trading on Friday, extending the strong upward move seen over the past few sessions.

Bond prices gave back some ground after an early rally but remained firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 8.3 basis points to 2.889 percent.

The ten-year yield closed lower for the third straight session, ending the day at its lowest closing level in a month.

The continued advance by treasuries came as traders looked to the relative safety of bands amid lingering concerns about the possibility of tighter monetary policy triggering a global recession.

Central banks from around the world have signaled their intent to continue to raising interest rates in an effort to fight inflation while acknowledging they can’t guarantee a “soft landing” for the economy.

Adding to the economic worries, the Institute for Supply Management released a report showing the pace of growth in U.S. manufacturing activity slowed by more than expected in the month of June.

The ISM said its manufacturing PMI slid to 53.0 in June from 56.1 in May, although a reading above 50 still indicates growth in the sector. Economists had expected the index to dip to 54.9.

With the bigger than expected decrease, the manufacturing PMI slumped to its lowest level since hitting 52.4 in June of 2020.

A separate report from the Commerce Department showed U.S. construction spending unexpectedly edged lower in the month of May.

Following the long holiday weekend, the Labor Department’s monthly jobs report is likely to be in the spotlight next week. Traders are also likely to keep an eye on reports on factory orders, the U.S. trade deficit and service sector activity.

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