Treasuries Give Back Ground Following Upbeat Retail Sales Data

(RTTNews) - After trending higher over the past few sessions, treasuries showed a notable move back to the downside during trading on Friday.

Bond prices came under pressure in early trading and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.7 basis points to 1.576 percent.

The pullback by treasuries came as a Commerce Department report showing an unexpected increase in U.S. retail sales reduced the safe haven appeal of bonds.

The report said retail sales climbed by 0.7 percent in September after jumping by an upwardly revised 0.9 percent in August.

The continued sales growth came as a surprise to economists, who had expected retail sales to edge down by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales advanced by 0.8 percent in September after spiking by an upwardly revised 2.0 percent in August.

Economists had expected ex-auto sales to rise by 0.5 percent compared to the 1.8 percent jump originally reported for the previous month.

A separate report from the Labor Department showed import prices in the U.S. increased by less than expected in the month of September.

The Labor Department said import prices rose by 0.4 percent in September after dipping by 0.3 percent in August. Economists had expected import prices to climb by 0.6 percent.

The report also showed export prices inched up by 0.1 percent in September after rising by 0.4 percent in the previous month. Export prices were also expected to increase by 0.6 percent.

Meanwhile, traders largely shrugged off a report from the University of Michigan unexpectedly showing a modest deterioration in U.S. consumer sentiment in the month of October.

The report showed the consumer sentiment index slipped to 71.4 in October from 72.8 in September. The dip surprised economists, who had expected the index to inch up to 73.1.

Reports on industrial production, housing starts, and existing home sales may attract attention next along with the Federal Reserve's Beige Book.