After seeing strength for much of the trading day on Friday, treasuries pulled back sharply following the latest news regarding the Greek debt negotiations.
Bond prices showed a notable move to the downside going into the close, ending the day modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.0 basis points to 2.133 percent.
The pullback by treasuries came on the heels of news that Greece reached a deal with eurozone creditors to extend its bailout agreement for four months.
A statement from the Eurogroup said the extension will give negotiators time to work out a possible follow-up arrangement.
The deal calls for Greek and European officials to agree to a series of reforms by the end of April, with Greece due to present a first list of reform measures on Monday.
The Eurogroup statement also suggests that Greece has agreed to keep existing austerity measures in place even though the Syriza party swept to victory on an anti-austerity platform.
While the four-month extension may only delay the inevitable, news of the deal has eased concerns about Greek making a destabilizing exit from the eurozone.
Further developments regarding Greece could attract attention next week, although the focus is likely to shift to the outlook for U.S. monetary policy.
Federal Reserve Chair Janet Yellen is scheduled to testify before both the House and the Senate, with traders likely to closely watch her remarks for hints about when the central bank plans to begin raising interest rates.
Trading could also be impacted by reaction to reports on new and existing home sales, consumer prices, durable goods orders, and fourth quarter GDP.
The material has been provided by InstaForex Company – www.instaforex.com