Treasuries Extend Upward Move Amid Continued Coronavirus Concerns

Treasuries showed a significant move to the upside during trading on Friday, extending the notable advance seen in the previous session.

Bond prices gave back some ground after moving sharply higher in early trading but remained firmly positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.4 basis points to 1.471 percent.

The continued strength among treasuries came as traders continued to keep a close eye on the latest coronavirus news, with Chinese officials reporting 1,109 new confirmed cases of the coronavirus, up sharply from 349 cases the previous day.

South Korean health authorities also reported 52 new cases of the fast-spreading disease, raising the national tally to 156, while the number of confirmed cases in Japan increased by 23 to 728.

A number of companies have warned about the impact of the coronavirus, with Coca-Cola (KO) forecasting the outbreak will trim 1 to 2 cents per share off its first quarter earnings.

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

NAR said existing home sales slumped by 1.3 percent to an annual rate of 5.46 million in January after surging up by 3.9 percent to a revised rate of 5.53 million in December. Economists had expected existing home sales to tumble by 1.8 percent.

Despite the monthly decrease, the report noted existing home sales in January were up by 9.6 percent compared to the same month a year ago.

Coronavirus news is likely to remain in the spotlight next week, although traders are also likely to keep an eye on reports on consumer confidence, new home sales, durable goods orders, and personal income and spending.

Bond trading could 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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