Treasuries Close Nearly Flat Ahead Of Next Week's Fed Meeting

(RTTNews) - Following the substantial rebound seen in the previous session, treasuries fluctuated over the course of the trading day on Friday before closing roughly flat.

Bond prices moved higher in morning trading but pulled back near the unchanged line in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.385 percent.

The nearly flat close by treasuries may partly have reflected trepidation ahead of the Federal Reserve's highly anticipated monetary policy meeting next week.

The Fed is not expected to announce an increase in interest rates following the meeting due to some signs of economic sluggishness, but traders will be paying close attention to any hints regarding the timing of the first rate hike.

The monetary policy statement will be accompanied by a press conference by Fed Chair Janet Yellen as well as the central bank's latest forecasts.

The early strength among treasuries came amid continued concerns about Greece's stalled negotiations with its international creditors.

With a repayment deadline looming at the end of the month, the lack of progress in the talks has led to renewed worries about a possible default by Greece.

Jonathan Loynes, Chief European Economist at Capital Economics, said, "Greece's creditors have made it clear that the ball is firmly in its court to make the concessions needed to reach a last-minute agreement."

"But even if Greece finally blinks, the stop-gap deal that will probably result is unlikely to bring a permanent end to the crisis," he added.

Meanwhile, traders largely shrugged off the latest batch of U.S. economic data, including a report from the University of Michigan showing a much bigger than expected improvement in consumer sentiment in June.

The report said the preliminary reading on the consumer sentiment index for June came in at 94.6 compared to the final may reading of 90.7. Economists had expected the index to show a much more modest increase to 91.2.

Earlier in the day, the Labor Department released a separate report showing that producer prices rose by more than expected in May due to a substantial rebound in energy prices.

The Fed is likely to be in the spotlight next week, although traders may also keep an eye on reports on industrial production, housing starts, and consumer prices.