Treasuries Show Modest Move To The Downside

(RTTNews) - After ending the previous session roughly flat, treasuries moved mostly lower over the course of the trading session on Friday.

Bond prices came under pressure in morning trading and remained stuck in the red for the remainder of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.7 basis points to 2.326 percent.

With the modest increase on the day, the ten-year yield reached its highest closing level in over two months.

The weakness among treasuries came amid reports President Donald Trump met with former Federal Reserve Governor Kevin Warsh to discuss his potential nomination as the next chair of the central bank.

The meeting, which was first reported by the Wall Street Journal, was also attended by Treasury Secretary Steven Mnuchin.

Warsh is seen as more hawkish than current Fed Chair Janet Yellen and has been a vocal critic of the Fed's monetary stimulus policies since the financial crisis.

On the U.S. economic front, the Commerce Department released a report showing personal income and spending both rose in line with economist estimates in the month of August.

The Commerce Department said personal income edged up by 0.2 percent in August after rising by a downwardly revised 0.3 percent in July.

Economists had expected income to rise by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.

The report said personal spending also inched up by 0.1 percent in August after climbing by an unrevised 0.3 percent in July. The uptick in spending matched expectations.

A separate report from MNI Indicators unexpectedly showed a significant acceleration in the pace of growth in Chicago-area business activity in the month of September.

MNI Indicators said its Chicago business barometer jumped to 65.2 in September from 58.9 in August, with a reading above 50 indicating growth.

The substantial increase by the business barometer came as a surprise to economists, who had expected the index to edge down to 58.5.

Economic data may have a significant impact on next week's trading, with the closely watched monthly jobs report due to be released next Friday.

Reports on manufacturing and service sector activity, construction spending, and international trade may also attract attention along with remarks by Yellen.