Treasuries Close Just Above The Unchanged Line

(RTTNews) - After seeing initial weakness, treasuries moved slightly higher over the course of the trading day on Friday, although activity was subdued.

Bond prices climbed well off their early lows, ending the day just above the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.58 percent.

With the turnaround, the ten-year yield extended a recent downward trend, pulling back further off last Thursday's nearly two-year closing high.

The rebound by treasuries came as traders continued to shrug off concerns about the outlook for the Federal Reserve's asset purchase program.

Treasuries may have benefited from a report from the Commerce Department showing an unexpected drop in wholesale inventories in June, which could lead to a downward revision to second quarter GDP data.

The report said wholesale inventories dipped by 0.2 percent following a revised 0.6 percent decrease in May. The drop came as a surprise to economists, who had expected inventories to increase by 0.4 percent.

Meanwhile, the report also showed that wholesale sales increased by 0.4 percent in June after climbing by 1.5 percent in June.

Following the relatively quiet economic calendar over the past week, a slew of data is scheduled to be released next week.

Traders are likely to keep a close eye on reports on retail sales, industrial production, housing starts, and producer and consumer prices.

However, reaction to the reports is likely to be shaded by how the data will impact the outlook for the Fed's stimulus program.