Treasuries Extend Yesterday's Significant Rebound

(RTTNews) - Treasuries saw some strength during trading on Friday, extending the significant rebound seen during the previous session.

Bond prices gave back some ground after an early advance but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.5 basis points to 4.306 percent.

With the continued decrease, the ten-year yield pulled back further off the four-month closing high set on Wednesday.

Treasuries continued to benefit from the Federal Reserve's widely expected decision on Thursday to lower interest rates by a quarter point.

After aggressively slashing interest rates by half a percentage point in September, the Fed said it has decided to lower the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent.

However, Fed Chair Jerome Powell stressed during his post-meeting press conference that rates are not on "any preset course" and said the central bank will make future decisions "meeting by meeting."

In U.S. economic news, preliminary data released by the University of Michigan showed consumer sentiment has improved by more than expected in the month of November.

The University of Michigan said its consumer sentiment index climbed to 73.0 in November from 70.5 in October. Economists had expected the index to inch up to 71.0.

With the bigger than expected increase, the consumer sentiment index reached its highest level since hitting 77.2 in April.

On the inflation front, the report said year-ahead inflation expectations slipped to 2.6 percent in November from 2.7 percent in October, hitting the lowest level since December 2020.

Long-run inflation expectations, on the other hand, inched up to 3.1 percent in November from 3.0 percent in October, remaining modestly elevated relative to the range of readings seen in the two years pre-pandemic.

Next week's trading may be impacted by reaction to the latest U.S. economic news, including reports on consumer and producer prices, retail sales and industrial production.