10-year Treasury yield: investor sentiment remains weak

The yield on the 10-year U.S. Treasury climbed on Tuesday as investor sentiment remained under pressure from stalled developments in global trade.

The benchmark 10-year Treasury yield was two basis points higher at 4.4263%. The 2-year Treasury yield was more than five basis points higher at 3.8064% as of 06:56 a.m. New York time.

One basis point is equal to 0.01%, while yields and prices share an inverse relationship.

Confidence among investors remained in the doldrums amid stalled global trade talks. Tensions between the world’s two largest economies appeared to escalate, as Beijing cautioned other countries against making agreements with the U.S. that could harm China’s interests.

Undermining confidence in U.S. assets is U.S. President Donald Trump’s heightened pressure campaign on U.S. Federal Reserve Chairman Jerome Powell to lower rates.

U.S. Treasurys have seen a sharp selloff in recent weeks, which sparked speculations of the parties selling them.

Preliminary data released by Japan’s finance ministry and parsed by Moody’s Analytics suggests that Japanese investors sold some foreign bonds, likely Treasuries, but not at a scale that would be large enough to explain the yield spike, the analytics firm wrote in a note.

“Weekly statistics on international securities flows show major Japanese investors were net sellers of foreign long-term bonds—most of which are likely U.S. Treasuries—between 30 March and 12 April,” said Stefan Angrick, Moody’s Analytics’ head of Japan and frontier markets economics.

“Net sales totaled ¥3.1 trillion, or around $21 billion, driven by a mix of lighter buying and some increased selling. Not nothing—but hardly enough to explain the yield spike,” Angrick added.