U.S. Treasury yields moved higher as China struck back at the U.S. over alleged Geneva trade deal violations.
At 5 a.m. ET, the 10-year Treasury yield was up over 2 basis points to 4.445%. The 2-year yield was less than a basis point higher, trading at 3.922%. The 30-year Treasury yield was over 4 basis points higher at 4.981%.
One basis point is equivalent to 0.01%. Yields and prices move in opposite directions.
Investors are closely watching trade relations between the U.S. and China, which have deteriorated in recent days after U.S. President Donald Trump accused China of violating a preliminary trade agreement with the U.S. on Friday.
China refuted these accusations on Monday, also accusing the U.S. of violating trade terms. The two countries had previously agreed to a 90-day pause on most tariffs, but the clash has raised concerns over the future of the deal.
On top of these concerns, Trump said, Friday, that tariffs will double on steel imports to 50%, from Wednesday.
The Trump administration is also facing a legal battle after the U.S. Court of International Trade invalidated much of the president’s tariffs on Wednesday. A day later, however, a federal appeals court granted the administration’s request to temporarily pause that ruling, effectively reinstating the duties for the time.
“It is really hard to keep up or predict what’s going to happen on trade at the moment, and that’s before we factor in the full ramifications from the court ruling last Thursday night, and then subsequent brief stay of execution for them on appeal,” Deutsche Bank analysts said in a note.
“For now it seems likely that the tariff uncertainty will linger for a long time ahead even if we’re still likely past the peak aggressiveness of US policy.”
Investors are also awaiting a number of economic reports this week, which will offer fresh insights on how tariffs are impacting the economy, such as the May nonfarm payrolls reading on Friday.
