U.S. Treasury prices fell on Wednesday, pushing yields higher, after remarks from Treasury Secretary Steven Mnuchin raised optimism that some progress on a U.S.-China trade deal was being made, lifting U.S. equities.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, +1.29% rose 3.2 basis points to 2.024%, while the 2-year note yield TMUBMUSD02Y, +1.72% climbed 4.7 basis points to 1.753%. The 30-year bond yield TMUBMUSD30Y, +0.68% ticked higher by 2.1 basis points to 2.547%. Debt prices move in the opposite direction of yields.
What’s driving Treasurys?
Ahead of the G-20 summit, Mnuchin said they were “90% on the way” to a deal, suggesting the meeting between President Donald Trump and Chinese counterpart Xi Jinping at the end of the week could help pave the way to an eventual trade agreement. Investors have closely watched officials from both sides amid mixed signs that the meeting between the two world leaders would yield progress in trade negotiations to the satisfaction of investors.
Futures for U.S. stocks jumped after Mnuchin’s comments. The S&P 500 SPX, -0.95% and the Dow Jones Industrial Average DJIA, -0.67% are poised to open higher on Wednesday.
Analysts will see if U.S. corporations are holding back investment plans as trade uncertainty shakes the confidence of business executives. Durable goods orders reading for May along with the trade deficit data for May is set to come out at 8:30 a.m. Eastern
What did market participants’ say?
“Mnuchin’s constructive spin on the prospects for a deal were credited for the bulk to the selling pressure in Treasuries and we’re on board with that interpretation; if for no other reason than the dearth of data or other developments,” wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.
What else is on investors’ radar?
The Treasury Department will auction off $41 billion of 5-year notes at 1 p.m. Eastern. The debt sale could help influence trading for the outstanding market.