Global Economy

US Treasury yields pare losses amid respite from trade fears

U.S. government debt yields were sharply higher Thursday morning, following a dramatic move lower in the previous session, as a flurry of central banks cut key interest rates.

U.S. Markets Overview: Treasurys chart

At around 03:30 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.7240%, while the yield on the 30-year Treasury bond was also higher at around 2.2502%.

The benchmark U.S. 10-year yield fell to a fresh three-year low and the 30-year bond rate neared an all-time low Wednesday, as investors continued to rush for safety amid an intensifying trade war between the world’s two largest economies.

The move came as central banks in New Zealand, India and Thailand surprised markets with aggressive easings. The Philippines central bank is expected to lower borrowing costs later in the session.

On Thursday, China reported trade data that was better-than-expected despite mounting economic pressure from elevated U.S. tariffs. It appeared to offer investors some respite from fears of a global currency war.

Stateside, Chicago Federal Reserve President Charles Evans suggested on Wednesday that he would be open to lowering interest rates in order to support inflation and counter risks to economic growth.

Market participants are seen building bets that the U.S. central bank will cut rates three more times by year-end, according to the CME FedWatch tool.

Policymakers at the Fed are next scheduled to discuss monetary policy settings in mid-September, with two more meetings to follow in October and December.

On the data front, the latest weekly jobless claims figures will be released at around 8:30 a.m. ET, followed by wholesale trade data for June slightly later in the session.

Meanwhile, the U.S. Treasury is set to auction $50 billion in four-week bills, $40 billion in eight-week bills and $19 billion in 30-year bonds.


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