Treasuries Regain Ground Following Fed-Inspired Weakness

(RTTNews) - After coming under pressure over the course of the two previous sessions, treasuries regained some ground during trading on Friday.

Bond prices climbed firmly into positive territory in morning trading and managed to end the day notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.8 basis points to 2.887 percent.

With the decrease on the day, the ten-year yield pull back off the three-month closing high that it set in the previous session.

The strength among treasuries came as the jump in yields seen in response to the Federal Reserve's tapering announcement on Wednesday increased the appeal of bonds.

On the economic front, the Commerce Department released a report showing that U.S. gross domestic product grew faster than previously estimated in the third quarter.

The Commerce Department said GDP increased by an upwardly revised 4.1 percent in the third quarter compared to the 3.6 percent growth estimated earlier this month. Economists had widely expected the pace of GDP growth to be unrevised.

Sal Guatieri, Senior Economist at BMO Capital Markets, said, "The strong Q3 growth performance vindicates the Fed's decision to begin tapering QE3."

"It also suggests the economy is poised for stronger growth in the new year than the middling 2.0% pace of the past year, meaning the tapering process will continue," he added.

While next week's trading activity is likely to be subdued due to the holiday on Wednesday, reports on personal income and spending, durable goods orders, and new home sales may still attract some attention.