Treasuries Finish Choppy Trading Day Slightly Higher

(RTTNews) - After recovering from early weakness to end the previous session roughly flat, treasuries showed a lack of direction over the course of the trading day on Friday.

Bond prices bounced back and forth across the unchanged line before eventually closing slightly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.0 basis points to 4.239 percent.

The choppy trading on the day came as traders kept an eye on the latest geopolitical developments, with easing concerns about tensions over Greenland being replace by worries about a confrontation between the U.S. and Iran.

After President Donald Trump ruled out the use of force to acquire Greenland and backed off tariff threats against Europe, he has now apparently shifted his attention back to Iran.

Trump told reporters aboard Air Force One on Thursday that a U.S. "armada" is heading toward the Middle East.

"We're watching Iran," Trump said. "You know we have a lot of ships going in that direction just in case. We have a big flotilla going in that direction and we'll see what happens."

Trump had previously backed down from threats of military strikes against Iran over its crackdown on widespread protests.

In U.S. economic news, the University of Michigan released a report showing a bigger than expected improvement in consumer sentiment contributing to the subsequent rebound.

The University of Michigan said its consumer sentiment index for January was upwardly revised to 56.4 from a preliminary reading of 54.0. Economists had expected the index to be unrevised.

With the unexpected upward revision, the consumer sentiment index is well above the December reading of 52.9.

While the Federal Reserve is widely expected to leave interest rates at its monetary policy next week, traders are still likely to keep a close eye on the accompanying statement for clues about future rate cuts.