Treasuries Move Notably Lower Ahead Of Next Week's Fed Decision

(RTTNews) - Treasuries moved notably lower over the course of the trading session on Friday, extending the pullback seen in the previous session.

Bond prices slid firmly into negative territory in morning trading and moved roughly sideways throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.7 basis points to 2.464 percent.

With the significant increase on the day, the ten-year yield ended the session at its highest closing level in well over a year.

The continued weakness among treasuries came as traders looked ahead to next week's Federal Reserve decision.

Following a two-day meeting of the Federal Open Market Committee, the Fed is scheduled to announce its monetary policy decision next Wednesday.

The Fed is widely expected to raise interest rates by a quarter point, reflecting the first rate hike by the central bank in a year.

Upbeat economic data may also have reduced the appeal of bonds, with a report from the University of Michigan showing a much bigger than expected improvement in consumer sentiment in the month of December.

The University of Michigan said the preliminary reading on its consumer sentiment index for December came in at 98.0 compared to the final November reading of 93.8. Economists had expected the index to inch up to 94.1.

"Consumer confidence surged in early December to just one-tenth of an Index point below the 2015 peak—which was the highest level since the start of 2004," said Richard Curtin, the survey's chief economist. "The surge was largely due to consumers' initial reactions to Trump's surprise victory."

The Fed is likely to be in the spotlight next week, although reports on retail sales, industrial production, and inflation may also attract attention as traders look for clues about the central bank's next move.

Bond traders may also keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury said it plans to auction $24 billion worth of three-year notes and $20 billion worth of ten-year notes next Monday and $12 billion worth of thirty-year bonds next Tuesday.