Treasuries Close Modestly Lower Following Choppy Trading Day

(RTTNews) - Treasuries showed a lack of direction over the course of the trading day on Friday before ending the session modestly lower.

After moving to the downside in early trading, bond prices turned higher as the day progressed only to pull back into the red in late-day trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged up by 1 basis point to 2.995 percent.

With the modest increase on the day, the ten-year yield partly offset the drop seen on Thursday but remained below Tuesday's two-year closing high.

The choppy trading seen for much of the session came as traders seemed somewhat reluctant to make any significant news amid a quiet day on the U.S. economic front.

Traders still kept an eye on comments from several Federal Reserve officials, including a speech by Fed Chairman Ben Bernanke.

In remarks at the American Economic Association's annual meeting in Philadelphia, Bernanke offered a vigorous defense of the unprecedented measures taken under his watch to spur the U.S. economy after the worst recession in decades.

"Skeptics have pointed out that the pace of recovery has been disappointingly slow, with inflation-adjusted GDP growth averaging only slightly higher than a 2 percent annual rate over the past few years and inflation below the Committee's 2 percent longer-term target," Bernanke said.

He added, "However, the recovery has faced powerful headwinds, suggesting that economic growth might well have been considerably weaker, or even negative, without substantial monetary policy support."

Bernanke also noted that the Fed's recent decision to begin scaling back its asset purchases did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed.

The speech is expected to be one of Bernanke's last public appearances before the end of his eight-year run as the Chairman of the Fed at the end of the month.

Following two holiday-interrupted weeks, trading activity may remain somewhat subdued next week in the days leading up to the release of the monthly jobs report on Friday.

Ahead of the jobs report, trading could be impacted by the release of reports on factory orders, service sector activity, and international trade. The Fed is also due to release the minutes of its December meeting.