Longer-dated Treasury debt prices rose Friday, aided by favorable data on February inflation.
Year-on-year inflation as recorded by the February core personal consumptionexpenditures (PCE) price index tapered off last month, helping long-dated issues in particular since they are most vulnerable to inflation. Inflation erodes the value of fixed-income securities.
Benchmark 10-year Treasury note prices, moving inversely to yields , climbed 9/32, while their yields eased to 3.49 percent from 3.54 percent late Thursday. Thirty-year bonds rose 18/32, their yields easing to 4.35 percent from 4.38 percent Thursday.
"The core PCE inflation number helped bonds," said Stone and McCarthy Research Associates analyst John Canavan.
"The diminution in inflation pressures which, with a great leap of faith, means that the fed funds rate could come down even more helped support the market," said William Sullivan, chief economist at JVB Financial Group in Boca Raton, Fla.
In a departure from the usual dynamic, bond prices rose even as stocks made gains.
"Stock investors embraced the message of rising personal incomes seen in the February personal income report; incomes are reasonably strong," Sullivan said. "This, along with some end-of-quarter book-squaring, is allowing stocks and bonds to do better simultaneously."
Two- and five-year Treasurys were unchanged, yielding 1.70 percent and 2.58 percent, respectively.
Separately, the Reuters/University of Michigan Surveys of Consumers report showed its consumer sentiment index fell to 69.5 in March from February's 70.8, but this news appeared to have little impact on bond prices.
Economists in a Reuters survey expected a final March reading of 70.0.