U.S. 10-year Treasury bond yields sank Tuesday to their biggest one-day drop since Aug. 1, after President Donald Trump said a U.S.-China trade deal might not come until after the 2020 presidential election, sparking a rush into haven assets.
What are yields doing?
The yield on the 10-year Treasury note TMUBMUSD10Y, +0.20% fell 12.7 basis points to 1.708%, its biggest one-day drop since Aug. 1, while the two-year Treasury yield TMUBMUSD02Y, +0.01% shed 8.2 basis points to 1.532%, its largest single-day decline since Oct. 31, according to Dow Jones Market Data. The 30-year Treasury bond yield TMUBMUSD30Y, +0.23% sank 12.3 basis points to 2.160%, its biggest one-day plunge since June 27, 2016. Yields and debt prices move in opposite directions.
What’s driving the market?
Yields were pulled sharply lower after Trump, speaking in London, said he had no deadline for completing long-running U.S.-China trade talks. “In some ways, I think it’s better to wait until after the election if you want to know the truth. But I’m not going to say that, I just think that,” he said.
Commerce Secretary Wilbur Ross followed up Trump’s comments on Tuesday in a CNBC interview, saying that the president was under no “time pressure” to strike a deal with China and that another round of tariffs would be imposed on Chinese goods on Dec. 15 unless there was “some real reason to postpone them.”
Analysts said it was unclear whether Trump’s remarks signaled an unraveling of talks or were merely a negotiating tactic. Either way, the response among investors was a swift push into haven assets.
“We are seeing a spike in bond prices,” said Charlie Ripley, senior investment strategist at Allianz Investment Management in