Prices of U.S. Treasurys edged up on Friday in light trading, with investors reluctant to take on large positions ahead of a Federal Reserve meeting next week, which will be scrutinized for signs over when the U.S. central bank is likely to reduce its bond purchase program.
Most economists and investors expect the Fed will reduce the size of the program in September, though Fed Chairman Ben Bernanke has stressed that any pullback remains data dependent.
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The meeting comes two days before Friday's crucial payrolls employment for July, the next major release that will give traders guidance on the likely next direction of bond yields.
"A lot of people want to know, is tapering going to start in September," said Dimitri Delis, interest-rate strategist at BMO Capital Markets in Chicago. "I think if you start getting some weaker numbers, you might see some of those expectations being scaled back."
The Fed meets beginning on Tuesday, and will release a statement when it concludes on Wednesday.