Treasuries Close Higher Following Slew Of Economic Data

(RTTNews) - Following the pullback seen in the previous session, treasuries moved back to the upside during trading on Friday.

Bond prices gave back some ground after an early rally but remained in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 2.319 percent.

The higher close by treasuries came following the release of several key economic reports, with the data suggesting that the Federal Reserve will not be in any hurry to raise interest rates.

Early in the day, the Commerce Department released a report showing retail sales unexpectedly decreased for the second consecutive month in June.

The Commerce Department said retail sales fell by 0.2 percent in June after edging down by a revised 0.1 percent in May. The continued drop in sales surprised economists, who had expected sales to inch up by 0.1 percent.

Excluding auto sales, retail sales still dipped by 0.2 percent in June following the 0.3 decline seen in May. Ex-auto sales were expected to rise by 0.2 percent.

A separate report released by the Labor Department showed consumer prices came in unchanged in the month of June.

The Labor Department said its consumer price index was flat in June after edging down by 0.1 percent in May. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices crept up by 0.1 percent for the third consecutive month. Core prices had been expected to rise by 0.2 percent.

The report said consumer prices in June were up by 1.6 percent compared to the same month a year ago, a deceleration from the 1.9 percent year-over-year growth in May.

The annual rate of growth in core consumer prices came in at 1.7 percent in June, unchanged from the previous month.

"With its dual mandate, the Fed needs to take into account the decline in the unemployment rate this year as well as the drop back in core inflation," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

"For that reason, we still expect the Fed to continue raising interest rates in the second half of this year," he added. "Nevertheless, the odds of a September rate hike are fading."

Meanwhile, the Federal Reserve released a report showing industrial production increased by slightly more than anticipated in the month of June.

The Fed said industrial production climbed by 0.4 percent in June after inching up by a revised 0.1 percent in May. Economists had expected production to rise by 0.3 percent.

Reports on import and export prices, homebuilder confidence, housing starts, and New York and Philadelphia-area manufacturing activity may attract attention next week.