Treasuries Move Back To The Upside After Yesterday's Downturn

(RTTNews) - After turning lower over the course of the previous session, treasuries showed a notable move back to the upside during trading on Friday.

Bond prices moved higher in early trading and remained firmly positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.7 basis points to 1.93 percent.

With the drop on the day, the ten-year yield more than offset the modest gain posted on Thursday, falling to its lowest closing level in well over a month.

The rebound by treasuries came as traders continued to digest the Federal Reserve's monetary policy statement, which was interpreted as indicating that the central bank plans to raise interest rates more slowly than previously anticipated.

While the Fed removed its pledge to remain "patient" regarding normalizing monetary policy, the statement also noted that economic growth has moderated somewhat

In her subsequent press conference, Fed Chair Janet Yellen said that removing the word patient from the statement doesn't mean the central bank is going to be impatient.

Traders also seemed to focus on the fact that the Fed lowered its outlook for interest rates at the end of this year.

The median projection for the mid-point of the fed funds target range at the end of 2015 is now 0.625 percent compared to 1.125 percent in December.

While the outlook for rates is likely to remain on traders' minds, next week's trading may be driven by reaction to reports on consumer prices, durable goods orders, and new and existing home sales.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of two-year, five-year, and seven-year notes.

The Treasury said it plans to auction $26 billion worth of two-year notes next Tuesday, $35 billion worth of five-year notes next Wednesday and $29 billion worth of seven-year notes next Thursday.