Treasuries Close Nearly Unchanged After Choppy Trading Day

After moving notably higher over the course of the previous session, treasuries showed a lack of direction during trading on Friday.

Bond prices spent much of the day lingering near the unchanged line before closing nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.632 percent.

The choppy trading on the day came as traders continued to digest yesterday’s Labor Department report showing initial jobless claims once again dropped to their lowest level in well over a year.

The data further reinforced the view that the disappointing monthly employment report for April was an anomaly and not a sign of an economic downturn.

Traders generally remain optimistic about the economic outlook but also remain wary of signs that the Federal Reserve will soon consider tapering its asset purchases.

Meanwhile, the National Association of Realtors released a report this morning showing an unexpected decrease in existing home sales in the month of April.

NAR said existing home sales tumbled by 2.7 percent to an annual rate of 5.85 million in April after plunging by 3.7 percent to a rate of 6.01 million in March. The slump surprised economists, who had expected existing home sales to surge up by 2.0 percent.

Existing home sales declined for the third straight month but were still up by 33.9 percent compared to the same month a year ago.

Looking ahead, next week’s trading may be impacted by reaction to reports on new home sales, consumer confidence, durable goods orders, and personal income and spending.

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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