Following the Thanksgiving Day holiday on Thursday, treasuries finished Friday’s abbreviated trading session slightly lower.

Bond prices climbed well off their lows of the session but still ended the day just below the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up nearly a basis point at 1.776 percent.

Treasuries rebounded from early weakness amid concerns rising tensions between the U.S. and China over the situation in Hong Kong could impact ongoing trade talks.

After President Donald Trump signed two bills in support of pro-democracy protesters in Hong Kong, a spokesman for China’s Foreign Ministry threatened strong countermeasures.

Foreign Ministry spokesman Geng Shuang accused the U.S. of interfering in China’s internal affairs and violating international law and the basic norms governing international relations.

“China will take strong counter-measures in response to the U.S. behavior that interferes in China’s internal affairs and undermines China’s interests,” Geng said.

“No one shall underestimate China’s determination in safeguarding national sovereignty, security and development interests,” he added. “Nor shall they misjudge China’s resolve in implementing the ‘one country, two systems’ principle and in upholding prosperity and stability in Hong Kong.”

With a fresh round of protests expected over the weekend, the dispute over the situation in Hong Kong could potentially derail the long-awaited phase one trade deal.

News on the trade front is likely to remain in focus next week, although traders are also likely to keep a close eye on the Labor Department’s monthly jobs report.

Trading could also be impacted by reaction to reports on manufacturing and service sector activity, the U.S. trade deficit, and consumer sentiment.

The material has been provided by InstaForex Company – www.instaforex.com