Treasuries Extend Upward Trend Despite Upbeat Economic Data

(RTTNews) - Treasuries showed a notable move to the upside over the course of the trading day on Friday, extending the upward trend seen over the past few sessions.

Bond prices jumped early in the session and remained firmly positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.3 basis points to 2.280 percent.

The strength among treasuries came despite the release of some upbeat economic data, including a Commerce Department report showing a substantial increase in retail sales in the month of September.

The Commerce Department said retail sales surged up by 1.6 percent in September after edging down by a revised 0.1 percent in August.

Higher gas prices contributed to the jump in retail sales, as sales by gasoline stations soared by 5.8 percent during the month.

Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, rose by 0.4 percent.

The University of Michigan also released a report showing an unexpected improvement in consumer sentiment in the month of October.

The report said the consumer sentiment index jumped to 101.1 in October after dipping to 95.1 in September. Economists had expected the index to edge down to 95.0.

With the unexpected increase, the consumer sentiment index surged up to its highest level reaching 103.8 in January of 2004.

A separate report from the Labor Department showed consumer prices increased by slightly less than expected in the month of September.

The Labor Department said its consumer price index climbed by 0.5 percent in September after rising by 0.4 percent in August. Economists had expected prices to increase by 0.6 percent.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in September after edging up by 0.2 percent in August. Core prices had been expected to rise by another 0.2 percent.

The annual rate of growth in consumer prices accelerated to 2.2 percent in September from 1.9 percent in August, while the annual growth in core consumer prices held at 1.7 percent.

Housing data may attract attention next week, with traders likely to keep an eye on reports on homebuilder confidence, housing starts, and existing home sales.

Reports on regional manufacturing activity, industrial production, and import and export prices are also scheduled to be released.

The Federal Reserve is also due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.