By Gunjan Banerji 

U.S. government bonds edged higher Friday as higher yields lured investors to buy Treasurys.

The yield on the 10-year Treasury note fell to 3.074% Friday, according to Tradeweb, from 3.076% Thursday. Yields fall as bond prices rise.

The 10-year yield fell to as low as 3.063% before rising.

Yields rose in the beginning of the week, reaching the highest levels in months as investors assessed a growing supply of corporate and government bonds and a solid economic outlook for the U.S.

Treasury yields then pared some of their gains on Thursday as the prospect of higher returns ignited new demand, according to some analysts. Investors bought both U.S. stocks and government bonds on Friday, with major stock indexes on track for fresh highs, the latest sign of continuing investor optimism about the U.S. economy.

British Prime Minister Theresa May warned Friday that Brexit talks had hit a logjam, calling on European leaders to propound new proposals. This potentially curtailed some of the selling that dominated the bond markets this week and spurred buying in government bonds, analysts said.

It was a "warning beacon that things are still happening below the surface even though stock markets are in a state of reasonable euphoria, " said Jim Vogel, an interest rates strategist at FTN Financial.

Investors will also be closely watching the Federal Reserve meeting next week, where many expect the central bank to raise interest rates. Analysts are also closely tracking talks between the U.S. and China on trade.

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

September 21, 2018 12:12 ET (16:12 GMT)

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