Treasuries faced early selling pressure on Friday, yet managed to recover throughout the day. Initially, bond prices fell, but later regained stability, closing the session nearly unchanged. As a result, the yield on the benchmark ten-year note rose slightly by 1.0 basis point to 4.428 percent after hitting a five-month intraday peak of 4.505 percent.
The initial decline in treasuries was attributed to traders responding to remarks made by Federal Reserve Chair Powell on Thursday. Powell indicated that the central bank doesn't feel rushed to decrease interest rates, citing the robust state of the U.S. economy. He emphasized that the Fed can afford to approach future monetary policy decisions with caution.
Although the Fed is still anticipated to lower interest rates next month, the CME Group's FedWatch Tool now indicates a reduced probability of a quarter-point rate cut, declining to 58.2 percent from 72.2 percent the previous day.
As the morning progressed, selling pressure eased, prompting some investors to purchase bonds at lower prices. Bond traders also evaluated a series of mixed U.S. economic data, which included slightly higher-than-expected retail sales in October and a continued decline in industrial production. Additionally, the Labor Department reported an unexpected rise in U.S. import prices for October.
After an eventful week on the U.S. economic scene, the upcoming week's calendar looks relatively subdued. However, reports on housing starts, existing home sales, and weekly jobless claims may still garner attention.
