Treasuries Extend Upward Move Amid Geopolitical Concerns

Following the notable advance seen in the previous session, treasuries saw further upside during trading on Friday.

Bond prices moved steadily in morning trading and remained firmly positive throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4 basis points to 1.932 percent.

Treasuries continued to benefit from their safe haven appeal as the Ukrainian government and Russian state-controlled media continued to exchanged accusations of cease-fire violations in the eastern part of the country.

News that Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Antony Blinken have agreed to meet in Europe next week had eased concerns about an imminent Russian invasion of Ukraine, but traders remain wary.

On the U.S. economic front, the National Association of Realtors released a report unexpectedly showing a sharp increase in existing home sales in the month of January.

NAR said existing home sales spiked 6.7 percent to an annual rate of 6.50 million in January after tumbling 3.8 percent to a revised rate of 6.09 million in December.

The substantial rebound surprised economists, who had expected existing home sales to slump by 1.3 percent to a rate of 6.10 million from the 6.18 million originally reported for the previous month.

With the unexpected jump, existing home sales reached their highest annual rate since hitting 6.65 million in January of 2021.

Meanwhile, a separate report released by the Conference Board showed an unexpected pullback by its reading on leading U.S. economic indicators.

The Conference Board said its leading economic index fell by 0.3 percent in January after climbing by a downwardly revised 0.7 percent in December.

The dip came as a surprise to economists, who had expected the index to rise by 0.3 percent compared to the 0.8 percent increase originally reported for the previous month.

Developments in Ukraine over the long weekend are likely to impact trading early next week, while traders are also likely to keep an eye on reports on consumer confidence, personal income and spending, and durable goods orders.

Bond trading may also be impacted by reaction to the results of the Treasury Department’s auctions of two-year, five-year and seven-year notes.

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