Treasuries Close Roughly Flat Following Choppy Trading Day

Treasuries showed a lack of direction throughout the session on Friday, as many traders were away from desks ahead of the long weekend.

Bond prices spent the day lingering near the unchanged line before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.485 percent.

The lackluster performance on the day came as many traders looked to get a head start on the Christmas weekend.

Traders shrugged off the slew of U.S. economic data released this morning, including a Commerce Department report showing a spike in new home sales to a ten-year high in November.

The Commerce Department said new home sales surged up by 17.5 percent to an annual rate of 733,000 in November from the revised October rate of 624,000.

Economists had expected new home sales to drop to 654,000 from the 685,000 originally reported for the previous month.

With the unexpected jump, new home sales in November were at their highest annual rate since reaching 778,000 in July of 2007.

Before the start of trading, the Commerce Department released a separate showing a rebound in durable goods orders in the month of November.

The Commerce Department said durable goods orders surged up by 1.3 percent in November after falling by a revised 0.4 percent in October.

The increase in orders came in below economist estimates for a 2.0 percent jump, although the revised drop in the previous month was much smaller than the 0.8 percent decrease that had been reported.

Excluding a rebound in orders for transportation equipment, durable goods orders edged down by 0.1 percent in November after spiking by a revised 1.3 percent in October.

Another Commerce Department showed a smaller than expected increase in personal income in the month of November, while personal spending climbed by more than expected.

The report said personal income rose by 0.3 percent in November after climbing by 0.4 percent in October. Economists had expected another 0.4 percent increase.

Meanwhile, the Commerce Department said personal spending climbed by 0.6 percent in November after edging up by 0.2 percent in October. Spending had been expected to rise by 0.5 percent.

Trading activity may remain somewhat subdued next week, as many traders are likely to remain away from their desks following the long weekend.

Reports on consumer confidence, pending home sales and Chicago business activity may still attract attention in the final trading week of the year.

Bond traders are also likely to keep an eye on the results of the Treasury Department’s auctions of two-year, five-year and seven-year notes.

The Treasury is due to sell $26 billion worth of two-year notes next Tuesday, $34 billion worth of five-year notes next Wednesday and $28 billion worth of seven-year notes next Thursday.

The material has been provided by InstaForex Company – www.instaforex.com