Treasuries showed a notable move to the upside during trading on Friday, more than offsetting the modest decrease seen in the previous session.
Bond prices reached new highs going into the close of trading, ending the day firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.7 basis points to 0.648 percent.
Treasuries moved higher late in the session as traders reacted to President Donald Trump’s highly anticipated press conference about China.
Trump harshly criticized China’s handling of the coronavirus, claiming Beijing instigated the “global pandemic” by allowing the disease to spread.
Following China’s recent move to approve a controversial security law for Hong Kong, Trump also said he is directing his administration to remove special exemptions for the city.
Trump argued Hong Kong is “no longer sufficiently autonomous” to warrant preferential treatment by the U.S., claiming China has abandoned the idea of “one country, two systems.”
The president also announced that he is suspending the entry of certain foreign nationals from China into the U.S. as well as instructing a presidential working group on financial markets to study Chinese companies listed on U.S. exchanges.
Trump also revealed that he is terminating the U.S.’ relationship with the World Health Organization, claiming China has total control of the agency.
In U.S. economic news, the Commerce Department released a report unexpectedly showing a substantial increase in U.S. personal income in the month of April, reflecting the distribution of stimulus checks by the federal government.
The Commerce Department said personal income spiked by 10.5 percent in April after tumbling by a revised 2.2 percent in March.
The jump in personal income came as a surprise to economists, who had expected income to plunge by 6.5 percent compared to the 2.0 percent slump originally reported for the previous month.
Meanwhile, the report showed a steep drop in personal spending due to the impact of the coronavirus-induced lockdown.
The Commerce Department said personal spending plummeted by 13.6 percent in April after a revised 6.9 percent slump in March.
Economists had expected spending to tumble by 12.6 percent compared to the 7.5 percent nosedive originally reported for the previous month.
Meanwhile, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by slightly less initially estimated in the month of May.
The report showed the consumer sentiment index for May was downwardly revised to 72.3 from the preliminary reading of 73.7. Economists had expected the index to be upwardly revised to 74.0.
Despite the unexpected downward revision, the consumer sentiment index is still slightly above the April reading of 71.8.
The monthly jobs report is likely to attract attention next week, with economists expecting the loss of about 10 million jobs in the month of May.
Traders are also likely to keep an eye on reports on manufacturing and service sector activity, the trade deficit, and weekly jobless claims.