After moving significantly higher early in the session, treasuries gave back ground as the trading day progressed on Friday but still closed in positive territory.

Bond prices ended the day modestly higher but well off their best levels of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.2 basis points to 2.924 percent.

The early strength among treasuries came amid renewed trade war concerns after President Donald Trump announced plans to impose a 25 percent tariff on $50 billion worth of Chinese goods that contain "industrially significant technologies."

Trump attributed the new tariffs to China's theft of intellectual property and and its other unfair trade practices.

"These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs," Trump said in a statement.

He added, "In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China."

Trump claimed he would impose additional tariffs on Chinese goods if China retaliates by imposing new tariffs on U.S. goods or services, raising non-tariff barriers, or taking punitive actions against American exporters.

Despite the threat, China announced new tariffs on 545 products imported from U.S., including agricultural products, vehicles and aquatic products.

China's Commerce Ministry previously accused Trump of launching a trade war and promised to impose tariffs matching the scale and intensity of the U.S. tariffs.

On the U.S. economic front, the Federal Reserve released a report showing an unexpected decrease in industrial production in the month of May.

The Fed said industrial production edged down by 0.1 percent in May after climbing by an upwardly revised 0.9 percent in April.

The dip came as a surprise to economists, had expected production to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

The unexpected decrease in production came amid a pullback in manufacturing output, which largely reflected a disruption in truck assemblies due to a major fire at a parts supplier.

Developments in the trade dispute between the U.S. and China may impact next week's trading along with reports on homebuilder confidence, housing starts, and existing home sales.

by P2PNews Staff Writer

editorial@p2pnews.com

Market AnalysisBB

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