Treasuries Finish Lackluster Trading Day Roughly Flat

(RTTNews) - After ending the previous session sharply higher, treasuries showed a lack of direction for much of the trading day on Friday before closing roughly flat.

Bond prices saw modest strength in morning trading but spent much of the afternoon lingering near the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by less than a basis point to 2.645 percent.

Uncertainty about the situation in Ukraine contributed to the choppy trading, with the Crimea region preparing to hold a referendum Sunday on whether to secede and rejoin Russia.

The U.S. and other western nations have said they will not recognize the outcome of the referendum, citing the lack of adequate preparation and the intimidating presence of Russian troops.

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held a six-hour meeting in London to discuss the ongoing crisis in Ukraine.

Both Kerry and Lavrov described the talks as "constructive," but they were unable to reach an agreement to address the escalating tensions.

Meanwhile, traders largely shrugged off some U.S. economic data, including a report from the Labor Department showing an unexpected drop in producer prices in February.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in February after rising by 0.2 percent in January. The modest decrease by the index came as a surprise to economists, who had expected prices to creep up by another 0.2 percent.

Reuters and the University of Michigan released a separate report showing an unexpected deterioration in consumer sentiment in March.

The report showed that the preliminary reading on the consumer sentiment index for March came in at 79.9 compared to the final February reading of 81.6. Economists had expected the index to inch up to a reading of 81.8.

Amna Asaf, an economist at Capital Economics, said most of the drop in consumer sentiment can be attributed to the unseasonably bad weather.

Reaction to the aftermath of the Crimea referendum could impact trading early next week, although traders are likely to be focused on the Federal Reserve meeting on Wednesday.

A slew of U.S. economic data is also likely to attract attention, with reports on industrial production, consumer prices, housing starts, and existing home sales all scheduled to be released next week.