Treasuries Move To The Downside Following Slew Of Economic Data

(RTTNews) - After turning lower over the course of the course of the previous session, treasuries saw further downside during trading on Friday.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7 basis points to 3.522 percent.

The weakness among treasuries came following the release of a slew of U.S. economic data, as traders look for clues about the outlook for interest rates.

Early in the day, the Commerce Department released a report showing retail sales fell by much more than expected in the month of March.

The Commerce Department said retail sales slumped by 1.0 percent in March after dipping by a revised 0.2 percent in February.

Economists had expected retail sales to decline by 0.4 percent, matching the decrease originally reported for the previous month.

Excluding a steep drop in sales by motor vehicle and parts dealers, retail sales still slid by 0.8 percent in March after coming in unchanged in February. Ex-auto sales were expected to dip by 0.3 percent.

A separate report from the Federal Reserve showed U.S. industrial production increased by more than expected in March, although the increase was largely due to a spike in utilities output.

The Fed said industrial production climbed by 0.4 percent in March after edging up by a revised 0.2 percent in February.

Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

Preliminary data released by the University of Michigan showed a modest improvement in U.S. consumer sentiment in the month of April.

The report showed the consumer sentiment index rose to 63.5 in April from 62.0 in March. Economists had expected the index to inch up to 62.7.

Meanwhile, the University of Michigan said year-ahead inflation expectations jumped to 4.6 percent in April from 3.6 percent in March.

"These expectations have been seesawing for four consecutive months, alternating between increases and decreases," said Hsu.

She added, "Uncertainty over short-run inflation expectations continues to be notably elevated, indicating that the recent volatility in expected year-ahead inflation is likely to continue."

At the same time, five-year inflation expectations held at 2.9 percent for fifth straight month and have stayed within the narrow 2.9 to 3.1 percent range for 20 of the last 21 months.

Following a busy week on the U.S. economic front, the calendar for next week is relatively quiet, although traders are likely to keep an eye on the latest housing data as well as the Federal Reserve's Beige Book.