Treasuries Extend Recovery Amid Volatility On Wall Street
After ending the previous session modestly higher, treasuries saw further upside during the trading day on Friday.
Bond prices saw initial strength and climbed more firmly into positive territory as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.4 basis points to 1.465 percent.
With the continued decrease on the day, the ten-year yield continued to give back ground after reaching its highest closing level in over three months on Wednesday.
Treasuries may have benefited from their appeal as a safe haven following recent volatility on Wall Street, with stocks seeing significant weakness in the month of September.
Concerns that supply chain bottlenecks could detail the global economic recovery may also have helped treasuries extend the recovery.
On the U.S. economic front, a report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. manufacturing activity but noted persistent supply chain issues.
The ISM said is manufacturing PMI crept up to 61.1 in September from 59.9 in August, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to edge down to 59.6.
“Manufacturing performed well for the 16th straight month, with demand, consumption and inputs registering month-over-month growth, in spite of continuing unprecedented obstacles and ever-increasing demand,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, “Panelists’ companies and their supply chains continue to struggle to meet demand due to difficulties in hiring and a clear cycle of labor turnover, as workers opt for more attractive job opportunities.”
The Labor Department’s closely watched monthly jobs report is likely to be in the spotlight next week, potentially overshadowing separate reports on factory orders, the U.S. trade deficit and service sector activity.
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