Treasuries Close Roughly Flat After Seeing Initial Strength

(RTTNews) - After failing to sustain an initial move to the upside, treasuries showed a lack of direction throughout much of the trading session on Friday before closing roughly flat.

Bond prices pulled back off their early highs and spent the rest of the day lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 4.257 percent.

The lackluster performance by treasuries came as traders digested the latest U.S. economic data, including a report from Standard & Poor's showing the S&P Global Flash US Composite PMI inched up to 54.6 in June from 54.5 in May, reaching its highest level since April 2022.

The service sector led June's expansion, with the Flash US Services Business Activity Index climbing to a 26-month high of 55.1 in June from 54.8 in May. S&P said the Flash US Manufacturing PMI also rose to 51.7 in June from 51.3 in May.

Meanwhile, the National Association of Realtors released a report showing existing home sales in the U.S. decreased roughly in line with economist estimates in the month of May.

The report said existing home sales slid 0.7 percent to an annual rate of 4.11 million in May after tumbling by 1.9 percent to an annual rate of 4.14 million. Economists had expected existing home sales to drop to a rate of 4.10 million.

The continued decline by existing home sales came as the median existing-home price reached a record high $419,300 in May, up 5.8 percent from $396,500 a year ago.

"Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers," said NAR Chief Economist Lawrence Yun.

"The mortgage payment for a typical home today is more than double that of homes purchased before 2020," he added. "Still, first-time buyers in the market understand the long-term benefits of owning."

A separate report released by the Conference Board showed its reading on leading U.S. economic indicators fell by more than expected in the month of May.

The Conference Board said its leading economic index decreased by 0.5 percent in May following a 0.6 percent decline in April. Economist had expected the index to dip by 0.3 percent.

The Commerce Department's report on personal income and spending is likely to be in focus next week, as it includes readings on inflation said to be preferred by the Federal Reserve.

Reports on new home sales, consumer confidence, durable goods orders and pending home sales may also attract attention next week.