Treasuries See Further Downside Ahead Of Next Week's Fed Meeting

After moving lower over the course of the previous session, treasuries saw some further downside during trading on Friday.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.4 basis points to 4.322 percent.

The continued weakness among treasuries came as the latest batch of U.S. economic data added to concerns about the outlook for interest rates ahead of next week’s Federal Reserve meeting.

The Labor Department released a report this morning showing a bigger than expected increase in U.S. import prices in the month of August as well as a much bigger than expected surge in U.S. export prices.

The Labor Department said import prices climbed by 0.5 percent in August after a downwardly revised 0.1 percent uptick in July.

Economists had expected import prices to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the report said export prices spiked by 1.3 percent in August after climbing by a downwardly revised 0.5 percent in July.

Economist had expected export prices to increase by 0.3 percent compared to the 0.7 percent advance originally reported for the previous month.

A separate report released by the New York Fed showed a substantial turnaround in New York manufacturing activity in the month of September.

The Federal Reserve also released a report showing U.S. industrial production increased by much more than expected in the month of August.

The report said industrial production climbed by 0.4 percent in August following a downwardly revised 0.7 percent advance in July.

Economists had expected industrial production to inch up by 0.1 percent compared to the 1.0 percent jump originally reported for the previous month.

Meanwhile, traders largely shrugged off a report from the University of Michigan showed a notable decrease in near-term and long-term inflation expectations.

The Fed’s monetary policy announcement is likely to be in the spotlight next week in what is otherwise a relatively light U.S. economic calendar.

Source: Read Full Article