Treasury Yields Dip Ahead of Make-or-Break Week for Wall Street

  • The 10-year Treasury yield declined slightly on Monday.
  • U.S.-China trade talks hit a snag over farm purchases.
  • FOMC is widely expected to keep interest rates on hold this upcoming Wednesday.

U.S. government debt yields edged slightly lower on Monday, as bond prices rose heading into a jam-packed week for the financial markets.

The yield on the benchmark 10-year Treasury bond, which moves inversely to price, rose 3 basis points to 1.85%. The yield on the 30-day Treasury bond also declined by around 3 basis points to 2.26%.

10 year treasury
The benchmark 10-year Treasury yield edges slightly higher on Monday. | Chart: CNBC

U.S.-China Trade Talks Hit Another Snag

The United States and China are struggling to come to terms on a new trade deal almost two months after President Trump declared “phase one” to be complete. White House economic adviser Larry Kudlow said Friday that China is haggling over how much American agricultural goods to buy as part of an interim agreement. The Chinese are reportedly seeking a rollback on existing tariffs before they commit to any trade deal.

Negotiations appear to have stalled a mere six days before the United States is scheduled to raise tariffs on Chinese imports. Although stocks declined on Monday, investors aren’t too concerned about the looming Dec. 15 tariff threat. According to Kevin O’Leary, equity markets are likely to continue higher regardless of the tariff escalation.

Some analysts have argued that a trade deal has already been priced into the market, as evidenced by the record surge in stocks prices since early November. CNBC’s Jim Cramer says, “people continue to believe that there’s going to be a deal because they think it’s rational.” Picking apart his comments, Cramer is implying that a no-deal outcome would adversely affect markets.

A phase one deal doesn’t deliver the ‘slam dunk’ that President Trump is hoping to achieve. For starters, it doesn’t address any of the core intellectual property or technology transfer…

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