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Treasuries Move Sharply Lower Amid Upbeat Comments About Trade Talks

Treasuries moved sharply lower during trading on Friday, extending the notable downward move seen over the two previous sessions.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped by 9.4 basis points to 1.752 percent.

The early slump by treasuries came as continued optimism about U.S.-China trade talks reduced the appeal of safe havens like bonds, with President Donald Trump making upbeat comments about the negotiations.

"Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days," Trump said in a post on Twitter. "I will be meeting with the Vice Premier today. All would like to see something significant happen!"

Trump noted in a subsequent tweet that a potential trade deal with China would not have to go through the "very long and politically complex Congressional Approval Process."

The tweets from Trump came after he told reporters on Thursday that the talks with China are going "really well."

"So, we just completed a negotiation with China. We're doing very well. We're having another one tomorrow. I'm meeting with the Vice Premier over at the White House," Trump said. "And I think it's going really well, I will say. I think it's going really well."

While Trump is almost always upbeat about talks with China, his remarks were backed up by a White House official, who told Reuters the talks had gone very well, "probably better than expected."

Treasuries remained firmly late in the session after a report from Bloomberg News said the U.S. and China reached a partial agreement Friday would broker a truce in the trade war and lay the groundwork for a broader deal.

People familiar with the matter told Bloomberg the deal would involve China agreeing to some agricultural concessions and U.S. providing some tariff relief.

Next week's trading may be impacted by any concrete developments out of the trade talks along with reports on retail sales, housing starts, and industrial production.

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