Treasury yields tick lower in thin holiday trading

U.S. Treasury yields on Friday ticked lower heading into the finish of a week of trading thinned by the mid-week holiday.

At about 2:15 p.m. ET, the yield on the benchmark 10-year Treasury note traded lower at 1.872%, while the yield on the 30-year Treasury bond traded lower at 2.308%. Bond yields move inversely to the price of the debt.

Additionally, the gap between 2-year notes and 10-year notes, a closely-watched "yield curve," flattened to about 26 basis points. If inverted, the yield curve is considered a recession indicator. Last week the gap in the 2-year and 10-year yields grew to its widest since Oct. 2018.

There are no auctions scheduled for Friday and no economic data releases expected. Trading volumes have been thin this week, with the markets closed on Dec. 25 and early on Dec. 24.

Treasury note auctions this week broadly saw strong demand, slowing any climb in yields.

Investors continue to run back to traditional assets with equities at record high levels. A climb in yields in December has accompanied this month's market rally, with both stocks and bond yields benefiting ever since the U.S. and China announced a phase one trade agreement. The two countries are in the process of translating the deal, aiming to sign it in early January.

In a regular press briefing on Thursday, the Chinese Commerce Ministry said China is in close touch with the U.S. on signing the initial trade pact. President Donald Trump said Tuesday the deal is "getting done," adding there will be a signing ceremony with Chinese leader Xi Jinping.

– CNBC's Spriha Srivastava contributed to this report.