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Treasuries Close Roughly Flat Ahead Of Trump-Xi Meeting

After recovering from an early move to the downside, treasuries showed a lack of direction for much of the rest of the trading session on Friday.

Bond prices spent the bulk of the day lingering near the unchanged line before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.00 percent.

The choppy trading on the day came as traders seemed reluctant to make any significant moves ahead of a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping.

Trump and Xi are not expected to come out of the meeting with a finalized trade deal, but traders will be looking for signs of progress toward kick-starting the stalled negotiations between the two economic superpowers.

Traders were also digesting some mixed economic data, including a report from the Commerce Department showing personal income increased by more than expected in the month of May.

Personal income climbed by 0.5 percent in May, matching the advance seen in April. Economists had expected income to rise by 0.3 percent.

The report also said personal spending rose by 0.4 percent in May following an upwardly revised 0.6 percent increase in April. The spending growth matched economist estimates.

Meanwhile, a separate report from report MNI Indicators unexpectedly showed a contraction in Chicago-area business activity in the month of June.

MNI Indicators said its Chicago business barometer tumbled to 49.7 in June after rising to 54.2 in May, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the index to edge down to 53.1.

With the much steeper than expected decline, the Chicago businesses barometer dropped below 50 for the first time since January of 2017.

Reaction to the outcome of this weekend's Trump-Xi meeting is likely to drive trading early next week, overshadowing reports on manufacturing activity and construction spending.

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