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NEW YORK (CNNMoney.com) -
Treasury prices climbed Friday on news that the current account deficit declined by more than expected, while the dollar slipped against the euro and the yen.
The benchmark 10-year note gained 4/32 to 110-13/32 to yield 4.45 percent, down from 4.47 late Thursday. The 30-year bond added 10/32 of a point to 110-20/32 to yield 4.65 percent, down from 4.67 in the previous session. Bond prices and yields move in opposite directions.
In shorter-dated debt, the two-year note was little changed, yielding 4.36 percent. The five-year note was up one tick, yielding 4.36 percent.
Bond prices climbed following the Commerce Department's release of the current account deficit, the day's only economic news. The quarterly report, a broad measure of U.S. global trade, reached $195.8 billion for the third quarter. Analysts surveyed by Briefing.com had expected a $205 billion deficit.
Earlier this week, the Federal Reserve Open Market Committee announced their decision to raise short-term interest rates by a quarter percentage point, bringing the overnight lending rate to 4.25 percent.
While the rate move came as little surprise, the committee at last changed the way it worded its statement, signaling to investors that the steady increases may slacken because inflation is in hand. (Click here for the full Fed statement.)
Treasury investors will be closely watching several economic reports due out next week, hoping for better picture of inflationary pressures. Of particular importance is Tuesday's producer price index, as well as the Federal Reserve's preferred inflationary gauge -- the core personal consumption expenditures index -- due out on Thursday.
"All the inflation data matter," D.A. Davidson's Hurley told Reuters, referring to the Fed's policy statement that stressed the importance of economic data in crafting the central bank's monetary policy over the next few months.
In related news, the Federal Reserve Bank of Philadelphia said Friday its president, Anthony Santomero, will step down on March 31, 2006 to start a new career, bringing his five-year term as head of the bank to an end.
The dollar fell Friday against the euro and yen.
The euro bought $1.2013, up from $1.1999 late Thursday. The dollar bought ¥115.70, up from ¥116.10 posted the previous session.
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