Treasuries Extend Upward Move Amid Global Stock Sell-Off

(RTTNews) - After ending the previous session sharply higher, treasuries saw some further upside over the course of the trading day on Friday.

Bond prices moved notably higher in early trading and remained firmly positive throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.8 basis points to 2.735 percent.

The ten-year yield added to the 8.7 basis point loss posted on Thursday, falling to its lowest closing level in nearly two months.

Treasuries benefited from weakness among stocks around the world, with a sharp pullback by the overseas markets weighing on Wall Street.

Yesterday's disappointing reading on Chinese manufacturing activity also continued to raise concerns about the outlook for the global economy.

The report from Markit and HSBC showed that their index of Chinese manufacturing activity fell to 49.6 in January from 50.5 in December, with a reading below 50 indicating a contraction. Economists had expected a more modest drop to 50.3.

A sell-off in emerging-market currencies also helped push treasuries higher amid concerns about China, political unrest, and U.S. monetary policy.

The Federal Reserve will move back into the spotlight next week, as the central bank is due to hold a two-day monetary policy meeting ending on Wednesday.

Traders are likely to keep a close eye on the Fed's comments regarding the outlook for its asset purchase program following December's decision to begin tapering.

Reports on new home sales, durable goods orders, fourth quarter GDP, and personal income and spending are also likely to attract some attention.