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Treasuries Close Modestly Higher After Seeing Early Weakness

After moving modestly lower in early trading, treasuries turned higher over the course of the trading day on Friday, extending the upward move seen earlier in the week.

Bond prices climbed well off their early lows to end the session modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 1.7 basis points to 1.76 percent after reaching an early high of 1.793 percent.

With the drop on the day, the yen-year yield added to losses posted earlier in the week, pulling back well of the four-month closing high it set last Friday.

The early weakness among treasuries was partly due to the latest news out of Europe, with the Financial Times reporting that European Union and Spanish officials were discussing the terms of a possible bailout for the country.

Selling pressure remained relatively subdued, however, and treasuries managed to stage a turnaround amid lingering concerns about the global economic outlook.

Nonetheless, trading activity was relatively subdued amid a lack of major U.S. economic data, with traders looking ahead to future catalysts following last week's Federal Reserve meeting.

Next week, trading could be impacted by the release of some key economic data, including reports on new home sales, durable goods orders, and personal spending, although the data may be seen as too backward-looking in light of the Fed's recent announcement of another round of quantitative easing.

by RTT Staff Writer

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