Treasuries Extend Post-Fed Upward Move

(RTTNews) - Extending the upward trend seen over the past few sessions, treasuries moved moderately higher during trading on Friday.

Bond prices moved steadily higher in early trading and remained positive for the remainder of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.2 basis points to 1.871 percent.

The strength shown by treasuries extended the upward move seen on the heels of the Federal Reserve's monetary policy announcement on Wednesday.

The Fed announcement was widely interpreted as dovish, as the revised forecast for interest rates showed that officials now expect only two rate hikes by the end of this year compared to the four predicted back in December.

The new median projection calls for rates at 0.9 percent at year's end, down from the previous estimate of 1.4 percent.

Traders were also reacting to a report from the University of Michigan showing an unexpected drop in consumer sentiment in the month of March.

The report said the preliminary reading on the consumer sentiment index for March came in at 90.0 compared to the final February reading of 91.7. The drop surprised economists, who had expected the index to inch up to 92.2.

With the unexpected decrease, the consumer sentiment index fell to its lowest level since a matching reading last October.

Richard Curtin, the survey's chief economist, said, "Consumer confidence eased in early March due to increased concerns about prospects for the economy as well as the expectation that gas prices would inch upward during the year ahead."

Next week is relatively quiet on the U.S. economic front, although traders are likely to keep an eye on reports on new and existing home sales and durable goods orders.

Nonetheless, the Good Friday holiday next Friday may keep some traders on the sidelines ahead of the long Easter weekend.