2017.09.2215:21:00UTC+00Geopolitical Concerns Contribute To Rebound By Treasuries

After trending lower over the past several sessions, treasuries regained some ground during trading on Friday amid geopolitical concerns.

Bond prices moved notably higher early in the session but pulled back off their best levels as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.6 basis points to 2.262 percent.

With the modest decrease on the day, the ten-year yield moved lower after ending the previous session at its highest closing level in well over a month.

The rebound by treasuries came amid an escalating war of words between North Korean leader Kim Jong Un and President Donald Trump.

In a statement circulated by state news agency KCNA, Kim described Trump's threat to "totally destroy" North Korea as "mentally deranged behavior."

Kim also called Trump's remarks "rude nonsense" and claimed he was not frightened by the president's threat.

"I am now thinking hard about what response he could have expected when he allowed such eccentric words to trip off his tongue," Kim said.

"Whatever Trump might have expected, he will face results beyond his expectation," he added. "I will surely and definitely tame the mentally deranged U.S. dotard with fire."

Trump responded to Kim's statement with a post on Twitter on Friday, calling the North Korean dictator a "madman."

"Kim Jong Un of North Korea, who is obviously a madman who doesn't mind starving or killing his people, will be tested like never before!" Trump tweeted.

The back-and-forth between Trump and Kim came as North Korean Foreign Minister Ri Yong Ho has said his country may consider testing a hydrogen bomb in the Pacific Ocean.

Nonetheless, overall trading activity was somewhat subdued amid a relatively quiet day on the U.S. economic front.

Developments regarding the situation in North Korea may impact trading next week, although traders are also likely to keep an eye on reports on new home sales, durable goods orders, and personal income and spending.

The Treasury Department's auctions of two-year, five-year, and seven-year notes may also attract attention among bond traders.

The Treasury plans to sell $26 billion worth of two-year notes next Tuesday, $34 billion worth of five-year notes next Wednesday and $28 billion worth of seven-year notes next Thursday.