Treasurys Strengthen Along With Trade Concerns

Date : 11/20/2019 @ 5:54PM
Source : Dow Jones News

Treasurys Strengthen Along With Trade Concerns

By Sam Goldfarb 

U.S. government bonds extended recent gains Wednesday after new concerns arose about the prospects for a U.S.-China trade agreement.

In recent trading, the yield on the benchmark 10-year U.S. Treasury note was 1.759%, according to Tradeweb, compared with 1.785% Tuesday.

Yields, which decline when bond prices rise, fell overnight after the Senate passed legislation late Tuesday aimed at stemming what senators said was the erosion of democratic freedoms in Hong Kong.

Though not directly tied to U.S.-China trade talks, some analysts said the legislation could exacerbate tensions between the two countries, making a trade deal more difficult. Passage of the bill also came as investors' optimism about a deal was already receding based on news reports describing friction between the two sides over issues such as China's demand for removing tariffs and resistance to buying a specific amount of U.S. farm products.

Concerns about trade have boosted Treasurys over the past week, a reversal of the selling that took place over the previous month when investors were more confident about a trade deal.

Investors often buy Treasurys during times of political and economic uncertainty because the bonds offer steady interest payments with essentially no risk of default.

Demand for Treasurys has pulled the yield on the 10-year note down from its recent peak of 1.930% on Nov. 8. The yield, though, remains comfortably above its 52-week closing low of 1.456% reached in early September.

Write to Sam Goldfarb at sam.goldfarb@wsj.com

 

(END) Dow Jones Newswires

November 20, 2019 12:39 ET (17:39 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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