Treasuries saw modest strength during trading on Friday, as traders looked to the relative safety of U.S.-backed bonds going into the long weekend.
Bond prices moved modestly higher in early trading and managed to remain positive throughout the shortened trading session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 1.745 percent.
Lingering concerns about the situation in Europe contributed to the appeal of treasuries, as some traders looked for a safe haven ahead of Memorial Day weekend.
While treasuries benefited from the concerns about potential developments over the long weekend, buying interest was subdued as many traders were already away from their desks.
Meanwhile, traders largely shrugged off the release of a report from Reuters and the University of Michigan showing that U.S. consumer sentiment in the month of May improved by more than previously estimated.
The report showed that the consumer sentiment index for May was upwardly revised to 79.3 from the mid-month reading of 77.8. The upward revision surprised economists, who had expected the index to come in unchanged.
With the upward revision, the index came in well above the final April reading of 76.4 and is now at its highest level since October of 2007.
Nonetheless, the consumer sentiment index is widely seen as a coincident indicator and not a sign of how consumers will behave going forward.
Developments in Europe are likely to remain in focus in the early part of next week, but attention is likely to turn toward the monthly U.S. jobs report as the week progresses.
Reports on consumer confidence, pending home sales, personal income and spending, and national manufacturing activity could also impact trading.
by RTT Staff Writer
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