Treasuries Move Modestly Higher Ahead Of Fed Announcement

(RTTNews) - Treasuries showed a modest move to the upside during trading on Friday, regaining ground following the pullback seen over the two previous sessions.

Bond prices gave back ground after an early advance but remained in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 4.626 percent.

The early upward move by treasuries came after the University of Michigan released revised data showing consumer sentiment unexpectedly deteriorated by more than previously estimated in the month of January.

The University of Michigan said its consumer sentiment index for January was downwardly revised to 71.1 from the preliminary reading of 73.2. Economists had expected the index to be unrevised.

The consumer sentiment index is down from the final December reading of 74.0, marking the first decrease in six months.

Buying interest waned over the course of the session, however, as traders looked ahead to the Federal Reserve's monetary policy announcement next week.

While the Fed is almost universally expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group's FedWatch Tool is currently indicating a 69.9 percent chance rates will be lower by at least a quarter point following the Fed's June meeting.

The Fed's monetary policy announcement is likely to be in the spotlight next week, although several key economic reports may also attract attention, including a report on personal income and spending that includes the central bank's preferred inflation readings.