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Treasuries Move Higher Amid Uncertainty About Trump-Xi Meeting

After ending the previous session slightly higher, treasuries saw some further upside during the trading day on Friday.

Bond prices moved to the upside early in the day and remained positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.2 basis points to 3.013 percent.

With the continued decrease on the day, the ten-year yield ended the session at its lowest closing level in well over two months.

The strength among treasuries came as traders looked to the safe haven of bonds amid uncertainty about the outcome of the highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping.

Trump and Xi are due to hold a dinner meeting on Saturday on the sidelines of the G20 summit in Buenos Aires, Argentina.

Ahead of the meeting, Trump has offered mixed remarks about the likelihood the U.S. and China will reach an agreement to end the escalating trade dispute between the world's two largest economies.

"I think we're very close to doing something with China, but I don't know that I want to do it because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes. So I really don't know," Trump said Thursday before departing for the summit.

"But I will tell you that I think China wants to make a deal. I'm open to making a deal," he added. "But, frankly, I like the deal we have right now."

In U.S. economic news, MNI Indicators released a report unexpectedly showing a substantial acceleration in the pace of growth in Chicago-area business activity in the month of November.

MNI Indicators said its Chicago business barometer spiked to 66.4 in November after falling to 58.4 in October, with a reading above 50 indicating growth in business activity. Economists had expected the index to edge down to 58.0.

The unexpected jump reflected increases across all five of the barometer's subcomponents, with resurgent orders, solid output and higher unfinished orders the month's key drivers.

Reaction to news regarding the Trump-Xi meeting is likely to drive trading early next week, while the monthly jobs report is likely to be in focus toward the end of the week.

Traders are also likely to keep an eye on Congressional testimony by Federal Reserve Chairman Jerome Powell as well as reports on manufacturing and service sector activity, construction spending and factory orders.

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