Treasuries See Further Upside Amid Renewed Rate Cut Optimism

(RTTNews) - Treasuries moved to the upside during trading on Friday, extending the advance seen over the course of the previous session.

Bond prices fluctuated after an early upward move but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.3 basis points to 4.063 percent.

The continued strength among treasuries partly reflect renewed optimism about the Federal Reserve lowering interest rates at its next monetary policy meeting in December.

CME Group's FedWatch Tool indicates the chances of a quarter point rate cut at the Fed's December meeting have soared to 69.5 percent from just 39.1 percent on Thursday.

The increased bets on a rate cut next month come following dovish remarks by New York Federal Reserve President John Williams.

During remarks at the Central Bank of Chile Centennial Conference, Williams described monetary policy as being "modestly restrictive" and said he sees "room for a further adjustment" to rates in the near term.

However, it is worth noting that the minutes of the latest Fed meeting revealed officials have "strongly differing views" about whether to continue cutting rates in December.

Potentially adding to the optimism about the outlook for interest rates, the University of Michigan released a report showing decreases by both year-ahead inflation and long-run inflation expectations in November.

Next week's trading may be impacted by reaction to the release of long-delayed U.S. economic data, including reports on retail sales, producer prices, and durable goods orders.