Treasuries Close Roughly Flat Ahead Of Next Week's Fed Meeting

(RTTNews) - Following the sell-off seen in the previous session, treasuries turned in a relatively lackluster performance during trading on Friday.

Bond prices regained ground after an early move to the downside and spent most of the rest of the day lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 4.304 percent.

With the slight increase, the ten-year yield closed higher for the fifth consecutive session, climbing well off last Friday's one-month closing low.

The choppy trading on the day came as traders seemed reluctant to make significant moves ahead of the Federal Reserve's monetary policy meeting next week.

While the Fed is widely expected to leave interest rates unchanged, traders will look to the accompanying statement for clues about the outlook for rates.

Recent hotter-than-expected inflation readings have reduced optimism about the likelihood of the Fed's first rate cut coming in June.

According to the CME FedWatch Tool, the probability of the Fed leaving rates unchanged in June has climbed from 25 percent to 40.7 percent.

On the U.S. economic front, a report released by the Labor Department showed import prices in the U.S. increased in line with economist estimates in the month of February.

The Labor Department said import prices rose by 0.3 percent in February after climbing by 0.8 percent in January. The uptick matched expectations.

Meanwhile, the report said export prices advanced by 0.8 percent in February following an upwardly revised 0.9 percent increase in January.

Economists had expected export prices to edge up by 0.2 percent compared to the 0.8 percent growth originally reported for the previous month.

The Fed also released a report showing a slight increase in U.S. industrial production in the month of February, with manufacturing and mining output recovering from weather-related declines in January

The Fed said industrial production inched up by 0.1 percent in February after falling by a downwardly revised 0.5 percent in January.

Economists had expected industrial production to come in unchanged compared to the 0.1 percent dip originally reported for the previous month.

Meanwhile, preliminary data released by the University of Michigan unexpectedly showed a slight deterioration in U.S. consumer sentiment in the month of March.

The report said the consumer sentiment index edged down to 76.5 in March after falling to 76.9 in February. Economists had expected the index to come in unchanged.

Year-ahead and long-run inflation expectations remained unchanged from the previous month at 3.0 percent and 2.9 percent, respectively.

The Federal Reserve Bank of New York also released a report showing New York manufacturing activity has contracted at a significantly accelerated rate in the month of March.

The Fed's monetary policy meeting is likely to be in the spotlight next week, overshadowing reports on homebuilder confidence, housing starts and existing home sales.