logo
Plus   Neg
Share
Email

Treasuries Close Moderately Lower Ahead Of Next Week's Fed Announcement

After ending the previous session roughly flat, treasuries moved moderately lower during the trading day on Friday.

Bond prices moved to the downside early in the session and remained in negative territory throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.2 basis points to 2.848 percent.

The lower close by treasuries came as traders looked ahead to the Federal Reserve's highly anticipated monetary policy announcement next Wednesday.

With the Fed widely expected to raise interest rates by 25 basis points, traders are likely to keep an eye on the accompanying statement for clues about the outlook for future rate hikes.

New Fed Chairman Jerome Powell's first press conference as head of the central bank is also likely to attract considerable attention.

Traders were also digesting a mixed batch of economic data, with reports showing an unexpected improvement in consumer sentiment and a bigger than expected jump in industrial production but also a sharp pullback in housing starts.

The University of Michigan said the preliminary reading on its consumer sentiment index for March came in at 102.0, up from the final February reading of 99.7. Economists had expected the index to edge down to 99.3.

"Consumer sentiment rose in early March to its highest level since 2004 due to a new all-time record favorable assessment of current economic conditions," said Richard Curtin, the survey's chief economist.

A separate report from the Federal Reserve showed a substantial rebound in industrial production in the month of February.

The Fed said industrial production surged up by 1.1 percent in February after dipping by a revised 0.3 percent in January. Economists had expected production to rise by 0.3 percent.

On the other hand, the Commerce Department said housing starts plunged by 7.0 percent to an annual rate of 1.236 million in February after jumping by 10.1 percent to a revised 1.329 million in January.

Economists had expected housing starts to drop by 2.7 percent to a rate of 1.290 million from the 1.326 million originally reported for the previous month.

The Commerce Department said building permits also tumbled by 5.7 percent to a rate of 1.298 million in February after surging up by 5.9 percent to a revised 1.377 million in January.

Building permits, an indicator of future housing demand, had been expected to slump by 5.4 percent to a rate of 1.32 million from the 1.396 million originally reported for the previous month.

The Fed announcement is likely to be in the spotlight next week, potentially overshadowing reports on new and existing home sales, durable goods orders, and leading economic indicators.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT