WASHINGTON (dpa-AFX) - After ending last Friday's trading little changed, treasuries show a significant move to the downside during trading on Monday.
Bond prices recovered from an initial move lower but once again came under pressure as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.6 basis points to 4.462 percent.
The weakness among treasuries came as traders kept an eye on the latest developments on the trade front amid further signs of rising tensions between the U.S. and China.
China on Monday pushed back against President Donald Trump's claims that it had broken the Geneva trade agreement, accusing the U.S. of violating the deal with increased tech export restrictions and the revocation of Chinese student visas.
'These practices seriously violate the consensus reached by the two heads of state on January 17, seriously undermine the existing consensus of the Geneva economic and trade talks, and seriously damage China's legitimate rights and interests,' a Chinese Ministry of Commerce spokesperson said.
A collapse of the U.S.-China trade agreement could lead to considerable weakness among stocks, which have shown a considerable recovery since Trump's 'reciprocal tariff' announcement in early April.
Meanwhile, a White House official told CNBC that Trump and Chinese President Xi Jinping could speak one-on-one 'very soon.'
The Trump administration has also announced it will double the current tariff rate on steel and aluminum imports from 25 percent to 50 percent.
On the U.S. economic front, a reading on U.S. manufacturing activity unexpectedly edged slightly lower in the month of May, according to a report released by the Institute for Supply Management.
The ISM said its manufacturing PMI slipped to 48.5 in May from 48.7 in April, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.5.
With the unexpected decline, the manufacturing PMI dipped to its lowest level hitting 48.4 in November 2024.
Reports on factory orders and job openings may attract some attention on Tuesday, although developments on the trade front are likely to remain in the spotlight.
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