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Treasuries Extend Yesterday's Move To The Downside

After coming under pressure over the course of the previous session, treasuries saw some further downside during trading on Friday.

Bond prices initially showed a lack of direction being slipping more firmly into negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.5 basis points to 0.860 percent.

With the increase on the day, the ten-year yield ended the session at its highest closing level in well over four months.

The weakness among treasuries was partly attributed to news that the Federal Reserve has adjusted the terms of the Main Street Lending Program to better target support to smaller businesses.

The Fed said the minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans.

Some upbeat economic data may also have reduced the appeal of treasuries, with a report from the Commerce Department showing personal income rebounded by more than anticipated in the month of September.

The Commerce Department said personal income climbed by 0.9 percent in September after tumbling by a revised 2.5 percent in August.

Economists had expected personal income to rise by 0.4 percent compared to the 2.7 percent nosedive originally reported for the previous month.

The report also showed a bigger than expected increase in personal spending, which surged up by 1.4 percent in September. Spending was expected to match the 1.0 percent jump seen in August.

A separate report from the University of Michigan showed consumer sentiment improved slightly more than initially estimated in the month of October.

The report showed the consumer sentiment index for October was upwardly revised to 81.8 from the preliminary reading of 81.2. Economists had expected the reading to be unrevised.

With upward revision, the consumer sentiment index is a bit further above the final September reading of 80.4.

The presidential election is likely to be in the spotlight next week, although the final results may not be known on election night.

Traders are also likely to keep an eye on the monthly jobs report as well as the Federal Reserve's latest monetary policy decision.

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