Treasury prices slipped in early Monday trading, pushing yields higher, as investors jumped into stocks following the apparent end of the Trump administration’s tariff spat with Mexico.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, +2.78% climbed 6.1 basis points to 2.145%, while the 2-year note yield TMUBMUSD02Y, +1.93% picked up 4.7 basis points to 1.896%. The 30-year bond yield TMUBMUSD30Y, +1.99% rose 5.3 basis points to 2.624%. Bond prices move in the opposite direction of yields.
What’s driving Treasurys?
On Friday, President Donald Trump said that he had declined to slap tariffs on Mexican imports which he had threatened as a way to stanch the flow of illegal immigration into U.S. borders. But he said he could still impose import levies if Mexico didn’t cooperate on border issues.
The sharp rise in global equities on the wave of trade optimism helped weigh on appetite for government paper. The Stoxx Europe 600 SXXP, +0.17% was up 0.2%, while Japan’s Topix index 180460, +1.34% booked a gain of 1.3%. Futures for the S&P 500 ESM19, +0.45% and the Dow Jones Industrial Average YMM19, +0.48% showed U.S. equities were poised to rise on Monday.
See: Time to panic on economy? No, but ongoing trade wars give a taste of unpleasant future
What did market participants say?
“In a swift move, Treasury prices declined during Tokyo hours as U.S./Mexico’s tariffs have been delayed for now,” wrote Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities.
What else is on investors’ radar?
In economic data, April’s job openings and labor turnover survey is set for release at 10 a.m. Eastern time. Investors are attuned to signs of weakness in the labor market following a disappointing jobs report on Friday, which showed the U.S. economy had only added 75,000 jobs in May.
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