Treasuries Move To The Downside After Seeing Early Strength

(RTTNews) - After moving to the upside early in the session, treasuries moved lower over the course of the trading day on Friday.

Bond prices pulled back well off their early highs and into negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.2 basis points to 1.582 percent after hitting a low of 1.541 percent.

Treasuries initially moved higher after the University of Michigan released a report showing an unexpected deterioration in U.S. consumer sentiment in the month of November.

The preliminary report said the consumer sentiment index slid to 66.8 in November from a final reading of 71.7 in October. The decrease surprised economists, who had expected the index to inch up to 72.4.

With the unexpected drop, the consumer sentiment index fell to its lowest level since hitting 63.7 in November of 2011.

Surveys of Consumers chief economist Richard Curtin said the deterioration in consumer sentiment was due to "an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation."

The data raised concerns about the economic outlook but also added to recent worries about inflation after the Labor Department's report on consumer prices earlier in the week.

The report showed consumer prices rose at their fastest annual rate in over thirty years in October, leading to speculation the Federal Reserve could begin raising interest sooner than had been expected.

Next week's trading may be impacted by reaction to some key economic data, including reports on retail sales, industrial production, housing starts, and regional manufacturing activity.