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Oct 16, 2019

Bonds | Treasury Yields Report: Treasury yields move lower amid US-China trade doubts, economic data

Thomas Franck, Silvia Amaro



Treasury yields inched lower Wednesday as investors began to doubt China’s promises to purchase vast amounts of U.S. farm goods as part of an early accord between Washington and Beijing.
U.S. debt yields slipped as the lack of clarity into the timing and size of China’s agricultural purchases persuaded some on Wall Street that the globe’s two largest economies aren’t much closer to resolving their protracted dispute.
The rate on the benchmark 10-year Treasury note fell to 1.75%, while the yield on the 30-year Treasury bond was little changed at 2.236%. Yields rise as prices fall.
Trade worried festered once again on Wednesday after the Wall Street Journal reported uncertainties remain about how large could be any forthcoming Chinese purchase of U.S. agrarian products.
Though equity markets rallied last week on White House declarations that the two nations had agreed to the first phase of a broader trade deal, the lack of detail has some worried Beijing could eventually renege on its promises.
Meanwhile, Bloomberg News said China wants U.S. tariffs on Chinese goods rolled back before moving forward with the purchases.
Traders are also monitoring news that China will take countermeasures against the United States after the House of Representatives passed the Hong Kong Human Rights and Democracy Act — a bill that asks various U.S. government departments to consider the special trading status of Hong Kong.
U.S. retail sales fell for the first time in seven months in September, sparking fears that the slowdown in manufacturing could be starting to affect the consumer side of the economy.
The Commerce Department said on Wednesday retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles. The decline was the first since February.
Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared to September last year, retail sales increased by 4.1%.

Treasurys

TICKER COMPANY YIELD CHANGE %CHANGE
US 3-MOU.S. 3 Month Treasury1.674-0.0030.00
US 1-YRU.S. 1 Year Treasury1.594-0.0520.00
US 2-YRU.S. 2 Year Treasury1.592-0.030.00
US 5-YRU.S. 5 Year Treasury1.567-0.030.00
US 10-YRU.S. 10 Year Treasury1.745-0.0240.00
US 30-YRU.S. 30 Year Treasury2.228-0.0020.00

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