U.S. government debt returns were mixed Wednesday morning, as international trade changes offered much-needed relief for markets gripped by political and financial uncertainty.
At approximately 03:15 a.m. ET, the return on the benchmark 10-year Treasury note, which moves inversely to price, was reduced at around 1. 6642%, just above that on the 2-year safety at 1. 6298%. Meanwhile, the return on the 30-year Treasury bond was higher at around 2. 1381%.
President Donald Trump said Tuesday that the move was made to prevent any possible effect on vacation shopping ahead of Christmas season. He added China would like to make a trade deal.
Recession sign in concentration
The traditionally viewed 2-year and 10-year Treasury curve was roughly 2 basis points from inversion on Wednesday, a happening heralded by many as a recession index. Market participants are now demanding higher rates of interest on short-term debt than they’re longer term debt, an event called an “inverted yield curve.”
On Tuesday, the spread between the two yields narrowed to only 1 basis point. A basis point is one hundredth of one percent.
Investors frequently provide the spread between the 10-year and the 2-year special attention because inversions of the area of the curve have preceded every recession over the past 50 years, albeit it took months even years before an economic downturn hit.
On the information front, import prices for July will be released at approximately 8:30 a.m. ET.
There aren’t any major Treasury auctions scheduled on Wednesday.
— CNBC’s Thomas Franck contributed to this report.