Treasuries Move Back To The Downside Following Yesterday’s Rebound

Following the rebound seen in the previous sessions, treasuries moved back to the downside during trading on Friday.

Bond prices staged a recovery attempt in afternoon trading but pulled back going into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.4 basis points to 3.879 percent.

The pullback by treasuries came as traders continued to express concerns about the outlook for interest rates headed into the New Year.

The Fed’s next monetary policy meeting is a month away, but the central bank is widely expected to continue raising rates in an effort to combat inflation.

In U.S. economic news, a report released by MNI Indicators showed a bigger than expected slowdown in the pace of contraction in Chicago-area business activity in the month of December.

MNI Indicators said its Chicago business barometer climbed to 44.9 in December from 37.2 in November, although a reading below 50 still indicates a contraction. Economists had expected the index to rise to 41.2.

The bigger than expected rebound came after the Chicago business barometer fell to its lowest reading since the 2008/09 global financial crisis, excluding the 2020 pandemic shock.

Following another long holiday weekend, the Labor Department’s closely watched monthly jobs report is likely to be in focus next week.

Traders are also likely to keep an eye on reports on manufacturing and service sector activity as well as the minutes of the latest Federal Reserve meeting.

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