Treasury securities experienced a significant decline on Friday, continuing the downward trend observed throughout the week.
During the day, bond prices declined decisively into negative territory and then stabilized in the afternoon. Consequently, the yield on the ten-year Treasury note, which inversely correlates with its price, increased by 7.5 basis points, reaching 4.399 percent.
This marks the fifth consecutive session where the ten-year yield has risen, recovering from the more than one-month closing low noted just a week ago.
The persistent decline in Treasuries is primarily driven by apprehensions regarding the Federal Reserve's stance on interest rates, with a crucial meeting scheduled for next week.
While it's widely anticipated that the Fed will reduce interest rates by another 25 basis points, traders are expected to closely analyze the accompanying statement for hints about future rate adjustments.
Recent inflation data, indicating it remains persistent, has sparked concerns that the Fed might reduce rates more gradually than previously expected next year.
According to the CME Group's FedWatch Tool, there is currently a 97.1 percent probability that the Fed will decrease rates by a quarter point next week. However, there is also an 81.0 percent likelihood that the central bank will keep rates steady in late January.
On another note, the Labor Department released a report today showing that U.S. import prices unexpectedly inched up in November.
Specifically, import prices increased by 0.1 percent in November, aligning with the revised uptick reported for October. Economists had anticipated a 0.2 percent decline in import prices compared to the originally reported 0.3 percent rise for the prior month.
Conversely, the report highlighted that export prices were unchanged in November, following an upwardly revised 1.0 percent increase in October.
Export prices were expected to decrease by 0.2 percent relative to the initially reported 0.8 percent rise for the previous month.
As the Fed's monetary policy decision approaches, traders are also likely to monitor upcoming reports on retail sales, industrial production, housing starts, existing home sales, and personal income and spending.
Particularly noteworthy is the personal income and spending report slated for release next Friday, as it includes the Fed's preferred metrics on consumer price inflation.
The material has been provided by InstaForex Company -
www.instaforex.com
