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Treasuries Close Roughly Flat Following Lackluster Session

After failing to sustain an initial upward move, treasuries showed a lack of direction over the course of the trading session on Friday.

Bond prices spent much of the afternoon lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed flat at 2.061 percent.

The choppy trading came as traders expressed some uncertainty about the outlook for treasuries after recent strength dragged the ten-year yield down to its lowest levels in ten months.

Traders may also have been reluctant to make any significant moves as they wait to see the impact of Hurricane Irma, with the massive storm expected to make landfall in Florida early Sunday.

While Irma was downgraded from a category 5 to a category 4, FEMA Administrator Brock Long warned the hurricane continues to be a threat that is going to devastate the U.S. in either Florida or some of the southeastern states.

The approach of Irma comes close on the heels of Hurricane Harvey, which led to widespread devastation and flooding in Texas.

Traders largely shrugged off a report from the Commerce Department showing wholesale inventories rose by more than anticipated in the month of July.

The Commerce Department said wholesale inventories climbed by 0.6 percent in July, matching the downwardly revised increase in June.

Economists had expected inventories to rise by 0.4 percent compared to the 0.7 percent increase originally reported for the previous month.

After a slow start, the economic calendar picks up in the latter part of next week with the release of reports on producer and consumer price inflation, retail sales, and industrial production.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury plans to sell $24 billion worth of three-year notes next Monday, $20 billion worth of ten-year notes next Tuesday and $12 billion worth of thirty-year bonds next Wednesday.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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