Treasuries Move To The Downside After Lacking Direction In Early Trading

(RTTNews) - After showing a lack of direction early in the session, treasuries moved moderately lower over the course of the trading day on Friday.

Bond prices bounced back and forth across the unchanged line in morning trading before sliding more firmly into negative territory in the afternoon.

Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.2 basis points to 4.232 percent.

The ten-year yield partly offset the 4.2 basis points drop seen on Thursday but ended the day shy off Wednesday's nearly three-month closing high.

The choppy trading early in the session came as traders reacted to mixed U.S. economic data, including reports on consumer sentiment and durable goods orders.

The University of Michigan said its consumer sentiment index for October was upwardly revised to 70.5 from a preliminary reading of 68.9. Economists had expected the index to be upwardly revised slightly to 69.0.

With the bigger than expected upward revision, the consumer sentiment index is now modestly above the final September reading of 70.1.

The consumer sentiment index has now increased for the third consecutive month, reaching its highest level since hitting 77.2 in April.

Meanwhile, the Commerce Department released a separate report showing new orders for durable goods fell by more than expected in September amid a continued slump by orders for transportation equipment.

The Commerce Department said durable goods orders slid by 0.8 percent in September, matching a revised decrease in August.

Economists had expected durable goods orders to fall by 0.5 percent compared to the unchanged reading originally reported for the previous month.

Excluding a 3.1 percent plunge by orders for transportation equipment, durable goods orders rose by 0.4 percent in September after climbing by 0.6 percent in August. Ex-transportation orders were expected to edge down by 0.1 percent.

Selling pressure emerged over the course of the session, however, as traders continued to express concerns the Federal Reserve will lower interest rates slower than previously anticipated.

The Fed is still widely expected to lower rates by a quarter point next month, but CME Group's FedWatch Tool currently indicates a 24.0 percent chance the central bank will leave rates unchanged in December.

Next week's trading is likely to be driven by reaction to the monthly jobs report as well as a report on personal income and spending that includes the Fed's preferred inflation readings.

Reports on consumer confidence, pending home sales and manufacturing sector activity may also attract some attention.