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Treasuries Give Back Ground On Upbeat Comments About Trade Talks

After moving notably higher over the past few sessions, treasuries gave back some ground during the trading day on Friday.

Bond prices moved to the downside early in the session and remained stuck in the red throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1.9 basis points to 1.834 percent.

The pullback by treasuries came amid renewed optimism about a U.S.-China trade deal following comments from White House officials.

White House economic adviser Larry Kudlow said Thursday that U.S. and Chinese negotiators are in contact every single day and are "getting close" to a phase one trade deal.

"It's not done yet, but there has been very good progress and the talks have been very constructive," Kudlow said at an event at the Council on Foreign Relations.

In an appearance on the Fox Business Network on Friday, Commerce Secretary Wilbur Ross said the talks are "down to the last details" and a deal will be completed "in all likelihood."

Adding to the positive sentiment, China has lifted a nearly five-year ban on imports of U.S. poultry in a goodwill gesture that could lead to more than $1 billion in annual shipments to China.

A report from the Commerce Department showing U.S. retail sales rebounded by slightly more than expected in October also reduced the appeal of bonds.

The Commerce Department said retail sales climbed by 0.3 percent in October, reversing the 0.3 percent drop in September. Economists had expected retail sales to rise by 0.2 percent.

Excluding a rebound in auto sales, the report said retail sales rose by 0.2 percent in October after edging down by 0.1 percent in September. Ex-auto sales had been expected to increase by 0.4 percent.

Meanwhile, traders shrugged off a report from the Federal Reserve showing a steep drop in industrial production in October, as the decrease was partly due to the since-resolved strike at General Motors (GM).

News on the trade front is likely to remain in focus next week, although traders are also likely to keep an eye on reports on homebuilder confidence, housing starts, and existing home sales as well as the minutes of the latest Federal Reserve meeting.

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