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Treasuries Give Back Ground Following Recent Strength

After moving sharply higher over the past several sessions, treasuries gave back some ground during trading on Friday.

Bond prices fluctuated after an early move to the downside but remained stuck in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.6 basis points to 0.699 percent.

The pullback by treasuries was partly due to profit taking, as bond traders cashed in on the rally seen earlier in the week.

Initial strength on Wall Street also led traders to move money out of bonds, although stocks gave back some ground as the day progressed.

A report from the University of Michigan showing a continued rebound in U.S. consumer sentiment in the month of June also reduced the appeal of bonds.

The preliminary report showed the consumer sentiment index for June climbed to 78.6 from 72.3 in May and 71.8 in April. Economists had expected the index to rise 75.0.

Surveys of Consumers chief economist Richard Curtin said the increase by the index reflected gains in the outlook for personal finances and more favorable prospects for the national economy due to the reopening of the economy.

Meanwhile, a separate report from the Labor Department showed a bigger than expected jump in U.S. import prices in the month of May.

The Labor Department said import prices surged up by 1.0 percent in May after plunging by 2.6 percent in April. Economists had expected import prices to increase by 0.6 percent.

The rebound in import prices came as fuel prices spiked by 20.5 percent in May following the 31.0 percent nosedive in the previous month.

The report also showed a rebound in export prices, which climbed by 0.5 percent in May after tumbling by 3.3 percent in April. Export prices were expected to rise by 0.6 percent.

Next week's trading may be driven by reaction to the latest news on the coronavirus virus, although traders are also likely to keep an eye on reports on retail sales, industrial production, and housing starts.

Federal Reserve Chari Jerome Powell's testimony before the Senate Banking Committee and the House Financial Services Committee is also likely to attract attention.

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