Treasury prices rose on Wednesday, pushing yields lower, to extend a turbulent week for the bond market as stock futures pointed to a sharply lower open for Wall Street after China announced its own batch of tariffs against the U.S.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, -0.79% was down 3.5 basis points to 2.753%. The 2-year note yield TMUBMUSD02Y, -0.71% fell 2 basis points to 2.254%, while the 30-year bond yield TMUBMUSD30Y, -0.46% slipped 2.9 basis points to 2.991%.
Bond prices move in the opposite direction of yields.
What’s driving Treasurys?
China announced retaliatory tariffs on U.S. goods, sparking fears that the White House and Beijing would escalate a trade skirmish into a full-blown trade war. Chinese officials said they would levy duties of up to 25% on 106 American products like airplanes. This comes after President Donald Trump’s administration had announced up to $50 billion of tariffs on China on Tuesday.
See: As the U.S.-China trade war starts to heat up, here’s the next step for investors
With U.S. stock futures set to fall at the open, haven-related buying of government bonds surged. Treasurys have served as a safe harbor from which investors have sought to shelter themselves from the resurgence of market volatility. Although, higher tariffs, and higher import prices, should induce inflation, putting pressure on bonds, the steep slide in stocks have overwhelmed those concerns, giving Treasurys a bid whenever stock values slipped.
Other haven investments like the Japanese yen USDJPY, -0.36% and gold GCM8, +1.08% also gained.
Read: 5 charts that show how China’s response to U.S. tariffs is rattling markets
What economic data is on investors’ radar?
- Payrolls-processing firm ADP estimated that the private sector created 241,000 jobs in March, a prelude to the Labor Department’s more widely-watched nonfarm payrolls report on Friday.
- The Institute of Supply and Manufacturing will release it’s services index for March at 10 a.m. Economists polled by MarketWatch are projecting it to fall to 59.0%, from 59.5% the previous month.
- Factory orders will also arrive at 10 a.m. Economist are expecting a reading of 1.7%.
- Investors will also get a chance to peer at the minutes from March’s meeting by the Federal Open Market Committee, it’s rate-setting body.
What other assets are on the move?
Stocks in Europe and Asia turned lower as trade jitters sapped appetite for risky assets. A trade war could also dampen global growth at a time when the European and Japanese economy are starting to find their feet.