Bonds Finish Little-Changed

U.S. Treasury prices headed out little-changed Friday with the long end slightly higher and the shorter about unchanged. Prices started with a bid but were worked lower through the session following some mixed data getting added drag as stocks aimed higher. Price pressure was countered by mild week- and month-end buying. Traders were talking-up next week’s data, specifically Friday’s marquee payrolls report which is preceded by income, spending, housing, confidence, and manufacturing data, any of which could put a lock on a June Federal Reserve rate hike by June 14.

While futures closed at 1 p.m., cash continued to lumber until 2 p.m., with the 30-year yield closed near the highs near 2.912% against a 2.8957% low, 2.92% close Thursday and 2.90% a week ago. The 10-year settled near 2.248% from a 2.23% low, 2.255% close and 2.23% May 19. The five-year went out near unchanged at 1.785% from a 1.7647% low and 1.79% last Friday. The two-year was also unchanged on the session and the week at 1.298% from a 1.2738% low.

The curve trade was flatter with the yield spread between the two- and 10-years narrowed to the tightest levels since October, settling near 95 from 96, while the gap between the five- and 30-year yields was squeezed to near 112.5 from a little over 113.

By Caroline Williams