Treasuries Move Notably Higher Amid Sell-Off On Wall Street

(RTTNews) - Following the pullback seen in the previous session, treasuries showed a strong move back to the upside during trading on Friday.

Bond prices moved notably higher in early trading and remained firmly positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.5 basis points to 2.033 percent.

With the decrease on the day, the ten-year yield extended a recent downtrend, ending the session at its lowest closing level in well over two months.

Treasuries benefited from their appeal as a safe haven amid a sell-off on Wall Street, with stocks falling sharply amid multiple negative catalysts.

Weakness in the Chinese markets weighed on U.S. stocks along with a notable decrease by the price of crude oil, which closed below $30 a barrel for the first time since late 2003.

Traders were also reacting to a batch of largely disappointing U.S. economic data, including a Commerce Department report showing a modest drop in retail sales in December.

The report said retail sales edged down by 0.1 percent in December following an upwardly revised 0.4 percent increase in November. Economists had expected sales to come in unchanged.

Excluding flat auto sales, retail sales still dipped by 0.1 percent in December after climbing by 0.3 percent in November. Ex-auto sales had been expected to rise by 0.2 percent.

A separate report from the New York Federal Reserve showed a significant contraction in regional manufacturing activity in January.

The New York Fed said its general business conditions index fell thirteen points to a negative 19.4 in January, with a negative reading indicating a contraction.

The Federal Reserve also released a report showing a bigger than expected drop in industrial production in the month of December.

The report said industrial production dropped by 0.4 percent in December after slumping by a revised 0.9 percent in November. Economists had expected production to dip by 0.2 percent

Meanwhile, traders largely shrugged off a report from the University of Michigan showing a continued improvement in consumer sentiment in the month of January.

Following the long holiday weekend, the price of crude oil and developments in China are likely to remain in focus next week.

Traders are also likely to keep an eye on U.S. reports on consumer prices, housing starts, and existing home sales.