Treasuries Close Nearly Unchanged After Seeing Early Strength

(RTTNews) - After failing to sustain an early upward move, treasuries gave back ground over the course of the trading day on Friday before closing roughly flat.

Bond prices pulled back well off their early highs, ending the day near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.682 percent after hitting a low of 2.645 percent.

The early strength among treasuries came following the notable move to the downside seen in the previous session, reflecting the see-saw movement of bonds in recent weeks.

Uncertainty about whether lawmakers in Washington will be able to follow-through on early steps toward an agreement to end the latest fiscal crisis also may have contributed to the early upward move.

Nonetheless, buying interest waned over the course of the morning, leading to the subsequent pullback seen as the day progressed.

Renewed optimism about the situation in Washington likely played a part in the pullback, as a meeting between President Barack Obama and the House Republican leadership on Thursday seems to have helped change the tone of the debate.

In a statement released following the meeting, the GOP leadership described the conversation as "useful and productive" but noted that no final decisions were made.

Ahead of the meeting, House Republicans proposed temporarily raising the debt ceiling to avoid default and allow time for negotiations.

While Obama is said to be willing to accept a temporary increase in the debt limit, he continues to push for legislation that would also end the ongoing government shutdown.

According to reports, Obama told the House GOP leadership to return to their members and find out what needs to be done to reach an agreement to end the shutdown.

On Friday, the president met with Senate Republicans regarding the need to reopen the government and raise the debt ceiling.

Any weekend developments in Washington could have a significant impact on next week's trading, with reports suggesting that some lawmakers are hopeful of having the government reopened by Monday.