Treasuries Close Modestly Lower Following Volatile Session

(RTTNews) - Treasuries saw considerable volatility over the course of the trading session on Friday before ending the day modestly lower.

Bond prices spent the day bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.7 basis points to 2.597 percent.

The choppy trading on the day came as traders continued to digest the Federal Reserve's decision to raise interest rates by a quarter point on Wednesday.

Traders were also reacting to reports that a Chinese Navy warship seized an underwater drone belonging to a U.S. oceanographic vessel in the South China Sea.

In U.S. economic news, the Commerce Department released a report showing a steep drop in new residential construction in the month of November.

The report said housing starts plummeted by 18.7 percent to an annual rate of 1.090 million in November from the revised October estimate of 1.340 million.

Economists had expected housing starts to dip to a rate of 1.230 million from the 1.323 million originally reported for the previous month.

Building permits, an indicator of future housing demand, also fell by 4.7 percent to a rate of 1.201 million in November from a revised 1.260 million in October.

The drop in building permits came as a surprise to economists, who had expected permits to rise to a rate of 1.240 million from the 1.229 million that had been reported for the previous month.

Next week's trading may be impacted by reaction to reports on new and existing home sales, durable goods orders, and consumer sentiment along with remarks by Fed Chair Janet Yellen.