Treasurys
U.S. Treasurys pared earlier gains on Friday as a U.S. sell-off equities subsided on reports that Russia had ended military exercises near the Ukrainian border.
Benchmark 10-year Treasury notes, whose yields hit a 14-week low of 2.349 percent earlier, were 1/32 lower in price and yielding 2.42 percent.
Thirty-year Treasury bonds also pared gains and were last down 5/32 in price to yield 3.23 percent. The long bond on Friday had yielded as little as 3.178 percent, its lowest since June 2013.
Price gains in shorter maturities were muted.
Treasurys rallied earlier U.S. air strikes in Iraq fueled investor anxieties already heightened by the Ukraine crisis, tit-for-tat economic sanctions between Russia and the West, and Argentina's unresolved debt default.
Fighting also resumed in Gaza between Palestinian militants and Israel.
"It's a big flight to quality trade," said Charles Comiskey, head of Treasury trading for Scotia Bank in New York. "It's a rudderless, leaderless world everywhere. There is a lot of fear, and the fear is driving people to the Treasury market."
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With investors focused on geopolitical matters, Treasurys trading is little affected by economic data, strategist and portfolio managers say.
On Friday, price gains pulled back only briefly on better-than-forecast data showing a 2.5 percent increase in U.S. productivity growth during the second-quarter. The report bolsters arguments Federal Reserve policymakers will raise interest rates sooner than investors believe.
"I don't think you have any fundamentals behind it," Comiskey said of this week's rally in Treasurys. "With our economy the way it is and Fed policies, I don't think you can make a case that we really should be here."
—By Reuters with CNBC
