Bond Report: Treasury yields struggle for direction as trading volume vanishes in Thanksgiving week

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U.S. Treasury yields were mostly unchanged on Friday as quiet descended on Wall Street, with most traders away from their desks due to the Thanksgiving Day holiday

The Securities Industry and Financial Markets Association recommends for the bond market to shutter on Friday at 2 p.m. Eastern.

The 10-year Treasury note yield TMUBMUSD10Y, +0.39%   was virtually flat at 1.769%. The 2-year note yield TMUBMUSD02Y, +0.77%   edged up 0.2 basis point to 1.628%, while the 30-year bond yield TMUBMUSD30Y, +0.41%   fell 0.3 basis point to 2.189%.

Investors mostly kept their eye on this week’s trade developments after President Donald Trump signed off on the Hong Kong Human Rights and Democracy Act, a bill supporting protesters in the Asian financial center. Many remain worried that tensions over Hong Kong could undermine recent progress in trade negotiations.

However, a report in the Wall Street Journal suggested Chinese officials were still seeking a trade deal.

Analysts suggested month-end buying could prop up bond prices on Friday, as money managers topped up on government paper to maintain the average maturity of their portfolios before the end of November. When debt rolls off a bond-fund portfolio, the average maturity will fall, drifting away from the maturity of their competing benchmark index.

Investors should expect quiet trading “with the lack of economic data in the U.S., however, month-end buying should keep the market well bid into the weekend,” said Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities.