US Treasury yields jump on US-China trade deal hopes

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U.S. government debt yields rose Wednesday as traders monitored the latest developments in U.S.-China trade talks.

The yield on the benchmark 10-year Treasury note jumped sharply to about 2.513 percent, while the yield on the 30-year Treasury bond climbed to 2.923 percent. Bond yields move inversely to prices.

U.S. and Chinese officials are reportedly getting closer to a trade deal, having resolved most of the outstanding issues in their protracted trade spat. Both countries slapped tariffs on billions of dollars’ worth of each other’s goods last year.

Beijing wants Washington to remove existing U.S. duties on Chinese imports, while the Trump administration wants China to agree to an enforcement mechanism to ensure the country abides by the deal, according to the Financial Times.

Executive Vice President for International Affairs at the U.S. Chamber of Commerce Myron Brilliant told reporters that 90 percent of the deal is done, but the final 10 percent remains the trickiest part of the negotiations and would require compromise, according to the FT.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are scheduled to meet with Chinese Vice Premier Liu He later on Wednesday to resume negotiations.

Private payrolls data released Wednesday showed job growth slumped to an 18-month low in March, another sign that an extended hiring streak may be starting to cool.

“The job market is weakening, with employment gains slowing significantly across most industries and company sizes,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening. If employment growth weakens much further, unemployment will begin to rise.”

Payrolls as reported by ADP and Moody’s Analytics increased by just 129,000 for the month, well below the 173,000 that economists surveyed by Dow Jones had forecast. March was the worst month since September 2017, which saw an increase of just 111,000.

Investors will receive the latest update on the employment situation from the Labor Department on Friday.

— CNBC’s Jeff Cox contributed reporting.

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