Treasuries Close Nearly Unchanged After Another Lackluster Session

After ending the previous session slightly higher, treasuries turned in a lackluster performance during trading on Friday.

Bond prices saw modest strength in early trading but pulled back near the unchanged line as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.659 percent.

Treasuries initially benefited from the release of a report from the Commerce Department showing a much smaller than expected increase in durable goods orders in the month of August.

The Commerce Department said durable goods orders rose by 0.4 percent in August after soaring by an upwardly revised 11.7 percent in July.

Economists had expected durable goods orders to surge up by 1.5 percent compared to the 11.4 percent spike that had been reported for the previous month.

Excluding a 0.5 percent increase in orders for transportation equipment, durable goods orders still climbed by 0.4 percent in August following a 3.2 jump in July. Ex-transportation orders were expected to shoot up by 1.5 percent.

Meanwhile, the report said orders for non-defense capital goods excluding aircraft, a reading on business spending, advanced by 1.8 percent in August after jumping by an upwardly revised 2.5 percent in July.

Buying interest remained relatively subdued, however, as traders seemed reluctant to make significant moves amid uncertainty about the economic outlook.

Traders also kept an eye on developments in Washington amid reports House Democrats plan to unveil a new $2.4 trillion coronavirus relief bill.

The price tag for the bill is $1 trillion less than a stimulus package the House passed back in May but may still be too high for Republicans.

The subsequent pullback by treasuries may partly have reflected the rally that emerged on Wall Street, with tech stocks leading the way higher.

The Labor Department’s monthly jobs report is likely to be in the spotlight next week, although reports on consumer confidence, pending home sales, personal income and spending and manufacturing activity may also attract attention.

Traders may also keep an eye on the first debate between President Donald Trump and Democratic nominee Joe Biden for clues about the outcome of the presidential election.

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