The US Treasury yield moved higher on Monday after the US and China agreed to cut tariffs on each other’s goods in a move welcomed by investors.
At 5:09am ET, 2010-year financial yield rose nearly six basis points to 4.433%, while 2-year financial yield increased from 10 basis points to 3.996%.
One basis point equals 0.01%, yield and price move in the opposite direction. The US and China negotiated to lower their trade contracts.
According to the terms of the transaction, tariffs between the two countries will fall from 125% to 10%. The US 20% obligation on China’s imports related to fentanyl is still in place, with the current total Chinese tariffs currently at 30%.
Previously, US tariffs on China were 145%, but China had levied 125% on US goods.
“We have had very productive consultations. We believe the venue here on Lake Geneva has added great equality to a very positive process,” U.S. Treasury Secretary Scott Bescent said at a press conference after holding talks in Switzerland with Chinese trade representatives over the weekend.
“We have reached an agreement on a 90-day suspension, and have fallen significantly below the tariff levels. Both sides of the mutual tariff will drop the tariffs by 115%,” Bescent said.
Investors are looking forward to a lot of economic data this week. This provides a perspective on how trade tensions have affected the economy since US President Donald Trump implemented “mutual” tariffs on global trading partners in early April.
Investors will analyze April’s consumer price index readings scheduled for Tuesday morning. We are also waiting for producer price indexes and retail sales data on Thursday.