US Treasury Yields Drop Amid US-China Trade Negotiations

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Last Friday, the debt prices of the government of the United States of America increased as the trade negotiations between the United States and China continued.

The yield on the benchmark 10-year Treasury note dropped to approximately 2.682 percent, while the yield on the 30-year Treasury bond fell to 3.037 percent. Bond yields move inversely to prices.

Market players continue to monitor the most recent round of negotiations between Beijing and Washington. The optimism has heightened over the chances of both countries securing a deal to end their protracted trade war, however, some experts say that the most difficult part is yet to come as high-level discussions continue into Friday.

During an interview with CNBC’s “Squawk Box Europe” last Friday, a senior investment manager at Aberdeen Standard Investments, James Athey, stated: “There’s obviously an incentive for both sides to reach a deal.”

He continued: “The problem is that you’re now getting to the more difficult part of the negotiation, which is things like the IP (intellectual property) problem.”

One of the biggest contentions of Donald Trump, the US President, with Beijing is the claim that the country has stolen intellectual property and trade secrets from American firms. Both nations are a week away from an early March deadline to secure a trade deal, however, the speculation has increased that there may be an extension to that target.

Elsewhere, a flurry of speeches from the Fed policymakers are scheduled throughout last Thursday with San Francisco Fed President Mary Daly, New York Fed President John Williams, St. Louis Fed President James Bullard, and Philadelphia Fed Chairman Patrick Harker expected to speak about the U.S. economy and monetary policy at separate events.