US 10-year Treasury yield hits one-month high on trade optimism

  • US 10-year yield has risen to a one-month high of 1.76%.
  • The yield has increased by more than 30 basis points in nine days.

A gradual de-escalation of US-China trade tensions is boding well for US treasury yields.

The yield on the benchmark 10-year Treasury yield is currently trading at 1.76% – the highest level since Aug. 8 – representing a two basis point gain on the day.

The uptick could be associated with the US President Trump's decision to delay the hike in tariffs on $250 billion worth of Chinese goods from current 25% to 30% to Oct. 15. The tariff hike was initially set to take effect on Oct. 1.

Trump's decision comes a day after China announced exemption for some US products like industrial grease from a recent round of tariffs.

Also, Politico reported last week about China's peace proposal to buy a modest amount of US agricultural goods.

The easing trade tensions seem to have weakened the haven demand for Treasuries over the seven days, allowing yields to recover ground. It is worth noting that the 10-year yield has added more than 30 basis points since bottoming out at 1.428% on Sept. 3.

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