Treasuries Pull Back Near Unchanged Line After Seeing Initial Strength

(RTTNews) - After moving to the upside early in the session, treasuries gave back ground over the course of the trading day on Friday.

Bond prices pulled back off their early highs and spent much of the day lingering near the unchanged line before closing roughly flat.

Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 4.609 percent after hitting a low of 4.568 percent.

Treasuries initially extended the upward move seen over the past few sessions as recent U.S. inflation data has led to renewed optimism about the outlook for interest rates.

Buying interest waned shortly after the start of trading, however, with a report from the Federal Reserve showing industrial production increased by much more than expected in December contributing to the subsequent pullback.

The Fed said industrial production jumped by 0.9 percent in December after rising by a revised 0.2 percent in November.

Economists had expected industrial production to climb by 0.3 percent compared to the 0.1 percent dip originally reported for the previous month.

The much bigger than expected increase by industrial production partly reflected substantial rebounds by utilities and mining output.