U.S. government debt prices were higher Friday morning, as investors monitored the prospect of a limited trade agreement between the world’s two largest economies.

At around 4:30 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.8905%, while the yield on the 30-year Treasury bond was also lower at around 2.3154%.

The U.S. and China secured a so-called “phase one” trade deal in principle on Thursday, three sources close to the negotiations told CNBC. The agreement was thought to be pending approval from President Donald Trump.

As part of the agreement, the U.S. would scrap additional charges set to take effect from Sunday. The U.S. also proposed cutting tariffs on $360 billion in Chinese goods by up to 50%. Bloomberg News and Dow Jones later reported that Trump had signed off on the deal.

Washington and Beijing have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

Economic data

On the data front, retail sales for November, core retail sales (excluding autos) for November and import prices for November will all be released at 8:30 a.m. ET. Business inventories for October will follow slightly later in the session.

Market participants are also likely to monitor a speech from New York Fed President John Williams on Friday. The U.S. central bank policymaker is expected to comment on monetary policy, shortly after the Fed decided to keep interest rates unchanged.

There are no major U.S. Treasury auctions scheduled on Friday.

— CNBC’s Fred Imbert contributed to this report.

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