TREASURIES-Yields rise on renewed optimism for U.S.-China trade deal

Posted In: News Date:Nov 7th, 2019

NEW YORK, Nov 7 (Reuters) - U.S. Treasury yields rose to
eight-week highs on Thursday as renewed optimism that the United
States and China will reach a deal to de-escalate their trade
war boosted risk appetite and reduced demand for safe-haven
China and the United States have agreed to cancel in phases
the tariffs imposed during their months-long trade war, the
Chinese commerce ministry said on Thursday, without specifying a
An interim U.S.-China trade deal is widely expected to
include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on
about $156 billion worth of Chinese imports, including
cellphones, laptop computers and toys.
“Global markets in general are looking towards where trade
goes,” said Justin Lederer, an interest rates strategist at
Cantor Fitzgerald in New York. “The market is being dictated by
headlines and it's risk on, risk off.”
Benchmark 10-year notes fell 23/32 in price to
yield 1.890%, the highest since Sept. 16, and up from 1.821%
late Wednesday.
The yields have risen from 1.67% on Friday on optimism over
a trade deal, and after data showed that job growth slowed less
than expected in October while wages rose.
The Treasury Department will sell $19 billion in 30-year
bonds on Thursday, the final sale of $84 billion in new
coupon-bearing supply this week.
The government sold $27 billion in 10-year notes on
Wednesday to strong demand and $38 billion in three-year notes
on Tuesday to solid demand.
Investors are also watching economic data for further clues
on whether the Federal Reserve is likely to make further
interest rate cuts.
The U.S. central bank cut rates last week for the third time
this year and indicated that additional rate decreases may be
unlikely in the near term.
New York Federal Reserve President John Williams said on
Wednesday that any changes in rates from here on will depend on
economic data.
The next major U.S. economic release will be consumer price
data for October released next Wednesday.