Treasuries Recover From Early Weakness To Close Roughly Flat

(RTTNews) - Treasuries came under pressure early in the session on Friday but regained ground over the course of the trading day.

Bond prices climbed well off their early lows before ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by just 1.0 basis points to 4.428 percent after reaching a five-month intraday high of 4.505 percent.

The early weakness among treasuries came as bond traders had the opportunity to react to Federal Reserve Chair Powell's remarks on Thursday suggesting the central bank doesn't need to hurry to lower interest rates.

Citing the strength of the U.S. economy, Powell said the Fed can take a careful approach to future monetary policy decisions.

The Fed is still seen as likely to lower interest rates next month, but CME Group's FedWatch Tool suggests the chances of a quarter point rate cut have fallen to 58.2 percent from 72.2 percent on Thursday.

Selling pressure waned over the course of the morning, however, leading some traders to pick up bonds at reduced levels.

Bond traders were also reacting to a mixed batch of U.S. economic data, with separate reports showing retail sales rose by slightly more than expected in October but a continued decrease by industrial production.

The Labor Department also released a report showing an unexpected increase by import prices in the U.S. in the month of October

Following a busy week on the U.S. economic front, the economic calendar for next week is relatively quiet, although reports on housing starts, existing home sales and weekly jobless claims may still attract attention.