Treasuries Show Steep Drop Amid Focus On Greek Negotiations

(RTTNews) - Treasuries moved sharply lower over the course of the trading day on Friday, extending the pullback seen throughout much of the week.

Bond prices came under pressure in early trading and remained firmly in negative territory throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.3 basis points to 2.476 percent.

With the increase on the day, the ten-year yield finished the session just shy of the eight-month closing high set earlier this month.

The sell-off by treasuries seemed to reflect optimism that Greece will ultimately reach an agreement with its international creditors despite recent signs of intransigence from both sides.

The latest reports suggest Greece has rejected a 15.5 billion euro, five-month bailout extension due to concerns about the tough conditions demanded in return.

European finance ministers are scheduled to meet again on Saturday to continue the negotiations, with German Chancellor Angela Merkel saying the weekend's talks will be "decisive."

Merkel told reporters early Friday that European leaders "agreed that everything must be done to find a solution on Saturday."

The last-ditch attempt to reach an agreement comes as Greece has warned that it will be unable to make a 1.6 billion euro payment to the International Monetary Fund at the end of the month without further aid.

Upbeat U.S. economic data may also have weighed on treasuries, with a report from the University of Michigan showing that consumer sentiment improved by even more than previously estimated in June.

The report said the consumer sentiment index for June was upwardly revised to 96.1 from the mid-month reading of 94.6.

Economists had expected the index to be unrevised from the preliminary reading, which was already up sharply from the final May reading of 90.7.

News regarding the Greek negotiations is likely to remain in focus next week, although traders are also likely to keep a close eye on the monthly U.S. jobs report.

Reports on U.S. manufacturing activity, pending home sales, and consumer confidence may also attract some attention ahead of the holiday next Friday.