Treasuries Close Modestly Higher Ahead Of Healthcare Vote

(RTTNews) - Following the pullback seen in the previous session, treasuries moved back to the upside over the course of the trading day on Friday.

Bond prices initially showed a lack of direction but climbed into positive territory as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.8 basis points to 2.400 percent.

The modest rebound by treasuries came as traders focused on developments on Capitol Hill, with the House set to hold a vote on a Republican bill to repeal and replace Obamacare.

House Republican leaders delayed a vote on the bill on Thursday amid indications of a lack of support, but President Donald Trump has demanded that the vote go forward today.

"After seven horrible years of ObamaCare (skyrocketing premiums & deductibles, bad healthcare), this is finally your chance for a great plan!" Trump said in a post on Twitter.

With Democrats expected to be unified in opposition, Republicans can afford only twenty-one defections in the House and are likely to face an even tougher uphill battle in the Senate.

Trump has warned Republican lawmakers that voters could punish them if they do not vote in favor of the legislation to dismantle Obamacare.

If a vote on the replacement fails, it could cast doubt on Trump's ability to deliver on promises of increased infrastructure spending, tax cuts and deregulation.

After a quiet start, the economic calendar picks up as next week progresses, with traders likely to keep an eye on reports on consumer confidence, pending home sales and personal income and spending.

Speeches by a number of Federal Reserve officials are also likely to attract attention after the central bank's interest rate hike earlier this month.

Bond trading could also be impacted by reaction to the results of the Treasury Department's auctions of two-year, five-year, and seven-year notes.

The Treasury said it plans to sell $26 billion worth of two-year notes next Monday, $34 billion worth of five-year notes next Tuesday, and $28 billion worth of seven-year notes next Wednesday.