Treasuries Extend Uptrend Amid Another Sell-Off On Wall Street

(RTTNews) - Extending a recent upward trend, treasuries moved moderately higher over the course of the trading day on Friday.

After some early indecision, bond prices moved steadily higher before closing the day firmly in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 3 basis points to 2.054 percent.

With the continued decrease on the day, the ten-year yield fell to its lowest closing level in almost four months.

The continued strength by treasuries came amid another sell-off on Wall Street, with the Dow plummeting by as much as 450 points to its lowest levels in almost ten months.

Treasuries benefited from a flight-to-safety amid concerns about developing economies and the outlook for U.S. interest rates.

Adding to the worries, the Chinese markets showed another steep decline overnight, with the Shanghai Composite Index plunging by 4.3 percent.

The weakness among Chinese stocks came as a report from Markit and Caixin showed that manufacturing activity in China slid to a six-year low in August.

The report said the preliminary reading on Chinese manufacturing activity dropped to 47.1 in August from 47.8 in July.

Markit also released a separate report showing that its preliminary reading on U.S. manufacturing activity came in at 52.9 in August compared to the final July reading of 53.8.

Treasuries seem in store for a pullback next week, but traders are likely to keep a close eye on reports on new home sales, durable goods orders, and personal income and spending.