Treasuries Move To The Downside Amid Rally On Wall Street

After ending the previous session roughly flat, treasuries moved to the downside over the course of the trading day on Friday.

Bond prices fluctuated in morning trading but spent the afternoon in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.7 basis points at 1.986 percent.

With the modest decrease on the day, treasuries extended the pullback from the rally seen early in the trading session on Thursday.

A rally on Wall Street may have reduced the appeal of bonds, with stocks extending the stunning rebound seen in the previous session.

The continued recovery by stocks came as some analysts suggested the selling in response to Russia’s invasion of Ukraine was overdone.

While the U.S. and its allies have imposed severe sanctions on Russia in response to the attack, the measures are not seen as crippling as some had feared.

The West’s seeming unwillingness to target Russia’s energy sector also helped ease worries about a spike in oil and gas prices fueling further inflation.

News that Russia is prepared to send a delegation to Belarusian capital Minsk for talks about Ukraine also contributed to drop by treasuries

Russia’s apparent willingness to hold talks comes after Ukrainian President Volodymyr Zelenskyy signaled we has open to discussing Ukraine’s “neutral status.”

Developments in Ukraine are likely to continue to attract attention next week, while traders are also likely to keep an eye on the monthly jobs data as well as reports on manufacturing and service sector activity.

Congressional testimony by Federal Reserve Chair Jerome Powell is also likely to be in focus, as traders look for additional clues about the outlook for monetary policy.

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