Treasuries Close Roughly Flat After Late-Day Pullback

Treasuries Close Roughly Flat After Late-Day Pullback

After seeing modest strength for much of the session, treasuries pulled back near the unchanged line going into the close of trading on Friday.

Bond prices gave back ground late in the session before ending the day roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.873 percent.

The late-day pullback by treasuries came after a report from the Wall Street Journal said Chinese and U.S. negotiators are drawing up a road map for talks to try to end their trade impasse.

Citing officials in both nations, the Journal indicated the plan would culminate in planned meetings between President Donald Trump and Chinese leader Xi Jinping at multilateral summits in November.

The report comes following yesterday's news that China accepted an invitation from the U.S. for a new round of trade talks to be held later this month.

China's Ministry of Commerce said that a Chinese delegation led by Vice Commerce Minister Wang Shouwen will travel to the U.S. for trade talks to be held with U.S. Under Secretary of Treasury for International Affairs David Malpass.

The Journal said the U.S.-China trade talks in Washington would take place on August 21st and 22nd, just before the next round of tariffs targeting $16 billion worth of goods on both sides kick in on August 23rd.

In U.S. economic news, a report from the University of Michigan unexpectedly showed a notable deterioration in U.S. consumer sentiment in the month of August.

The preliminary report said the consumer sentiment index dropped to 95.3 in August after edging down to 97.9 in July. Economists had expected the index to inch up to 98.0.

Surveys of Consumers chief economist Richard Curtin said the decrease in consumer sentiment was concentrated among households in the bottom third of the income distribution amid less favorable perceptions of market prices.

«Overall, the data indicate that consumers have little tolerance for overshooting inflation targets, and to the benefit of the Fed, interest rates now play a more decisive role in purchase decisions,» Curtin said.

Meanwhile, a separate report from the Conference Board showed a bigger than expected increase by its index of leading U.S. economic indicators in the month of July.

The Conference Board said its leading economic index climbed by 0.6 percent in July following a 0.5 percent increase in June. Economists had expected the index to rise by 0.4 percent.

«The U.S. LEI increased in July, suggesting the US economy will continue expanding at a solid pace for the remainder of this year,» said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.

Following the slew of U.S. economic data released over the past week, the economic calendar for next week is relatively quiet.

Reports on new and existing home sales and durable goods orders are still due to be released along with the minutes of the latest Federal Reserve meeting.

The Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, is also likely to attract attention later in the week.

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