After moving sharply higher over the course of the previous session, treasuries showed a notable move back to the downside during trading on Friday.
Bond prices moved steadily lower over the course of the session, ending the day firmly in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.4 basis points to 1.949 percent.
With the increase on the day, the ten-year yield offset the drop seen on Thursday, climbing back close to the nearly two-month closing high it set on Tuesday.
The sharp pullback by treasuries came on the heels of the release of a pair of better than expected U.S. economic reports, including a report showing a substantial improvement in consumer sentiment in the month of May.
Thomson Reuters and the University of Michigan said the preliminary reading on their consumer sentiment index for May came in at 83.7 compared to the final April reading of 76.4.
With the sharp jump, the consumer sentiment index came in well above economist estimates for a reading of 78.0 and reached its highest level since July of 2007.
Jennifer Lee, senior economist at BMO Capital, said, "This much better-than-expected report indicates that stock markets at record highs, appreciating house values, and a generally stronger economy (notwithstanding the softer patch we're currently in) does good things to confidence."
A separate report from the Conference Board showed that leading economic indicators rose by more than anticipated in April, led by building permits and the interest rate spread.
The Conference Board said its leading economic index rose by 0.6 percent in April following a revised 0.2 percent decrease in March. Economists had been expecting a more modest 0.3 percent increase.
Following the slew of economic data released over the past week, the economic calendar for next week is relatively light. Nonetheless, traders are likely to keep an eye on reports on new and existing home sales, durable goods orders, and weekly jobless claims.
Trading may also be impacted by remarks from Federal Reserve Chairman Ben Bernanke, who is due to testify on the outlook for the U.S. economy before the Joint Economic Committee of Congress.
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