After trending lower over the past few sessions, treasuries showed a substantial move back to the upside during trading on Tuesday.
Bond prices moved sharply higher in morning trading and remained firmly positive throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 12.7 basis points to 1.709 percent.
Treasuries benefited from the appeal as a safe haven amid renewed trade concerns after President Donald Trump suggested he might prefer to wait until after the 2020 elections to strike a trade deal with China.
Trump told reporters at a NATO summit in London there is no deadline to reach a trade deal, adding, “In some ways, I think it’s better to wait until after the election.”
“But they want to make a deal now, and we’ll see whether or not the deal’s going to be right; it’s got to be right,” Trump said.
Trump claimed a potential trade deal is only dependent on whether he wants to sign it, because the U.S. is “doing very well” and China is “having by far the worst year that they have had in 57 years.”
The comments from the president added to rising trade concerns after his administration threatened to impose duties of up to 100 percent on $2.4 billion in French imports, including champagne and handbags.
The threat comes after the administration concluded France’s new digital services tax discriminates against U.S. companies such as Google (GOOGL), Apple (AAPL), Facebook (FB), and Amazon (AMZN).
Any news on the trade front will continue to attract attention on Wednesday, although traders are also likely to keep an eye on reports on private sector employment and service sector activity.
The material has been provided by InstaForex Company – www.instaforex.com