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Prices trim gains as EU reaches deal with Greece

U.S. government debt prices pared some gains on Friday after Euro ministers and Greek officials reached an agreement to extend heavily indebted Greece's financial rescue by four months.

The bailout will be extended for four months.

An agreement removes the immediate risk of Greece running out of money next month and possibly being forced out of the single currency area. It provides a breathing space for the new leftist-led Athens government to try to negotiate longer-term debt relief with its official creditors.

The U.S. 10-year benchmark Treasury notes yield was around 2.14 percent after closing at 2.112 percent on Thursday, reversing earlier declines, which saw yields fall to 2.0976 percent following the upbeat data.

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It comes after gains earlier in the week following the Fed's latest policy meeting minutes, which struck a dovish tone and diffused investor fears of a potential rate hike as early as June.

However, Thursday's strong labor market data has led some investors to say an earlier rate rise could be back on the cards.

Thirty-year bond yields were at 2.74 percent, after closing at 2.576 percent Thursday, partly due to a $9 billion Treasury auction of inflation-protected 30-year bonds, according to Reuters.

In Europe, a crucial meeting between Greece and euro zone finance ministers is underway, with talks over an extension to Greece's loan agreement due to continue after Germany rejected its request Thursday.

Read MoreGermany snubs Greece: What to watch for next

Without securing additional funding, Greece is set to run out of money to pay down its debts as early as the end of March, risking default and a possible exit from the euro zone.

In oil markets, Brent crude slipped below $60 per barrel before ticking back over the key level Friday, as sky high U.S. crude supply weighed on prices.

U.S. crude inventories rose to 425.6 million barrels last week, up by 7.7 million barrels, data from the Energy Information Administration showed Thursday, marking the sixth straight week of record high gains. U.S. crude traded around $51.17 per barrel.

Reuters contributed to this report.