Treasuries Close Modestly Higher After Choppy Trading Day

(RTTNews) - Following the pullback seen in the previous session, treasuries showed a lack of direction throughout much of the trading session on Friday.

Bond prices spent the day bouncing back and forth across the unchanged line before closing modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 2.002 percent.

The lackluster performance by treasuries came as traders digested a slew of U.S. economic data, including a Commerce Department report showing a downward revision to the pace of economic growth in the fourth quarter.

The report said U.S. gross domestic product increased by a downwardly revised 2.2 percent in the fourth quarter compared to the previously reported 2.6 percent growth. The growth represents a notable slowdown from the 5.0 percent jump seen in the third quarter.

Despite the downward revision, the pace of GDP growth during the fourth quarter still came in slightly above economist estimates for a 2.1 percent increase.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the U.S. economy remains stuck in the 2.25-2.5% range as productivity growth remains well below the long term average."

Meanwhile, the National Association of Realtors released a report showing that pending home sales climbed to best level in eighteen months in January.

NAR said its pending home sales index jumped 1.7 percent to 104.2 in January after falling 1.5 percent to an upwardly revised 102.5 in December. With the increase, the index reached its highest level since August of 2013.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The University of Michigan also released a report showing that U.S. consumer sentiment deteriorated by less than previously estimated in the month of February.

Economic data may be in focus next week, with traders likely to keep a close eye on the monthly jobs report due next Friday.

Ahead of the jobs data, trading could be impacted by reports on personal income and spending, manufacturing and service sector activity, and labor productivity.