Treasuries Surge As Trump Threatens 'Massive Increase' In Tariffs On China

(RTTNews) - Treasuries moved sharply higher during trading on Friday, more than offsetting the modest weakness seen in the previous session.

Bond prices surged in morning trading and saw some further upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, plunged by 9.7 basis points to 4.051 percent.

With the steep drop on the day, the ten-year yield tumbled to its lowest closing level in well over three weeks.

Treasuries benefitted from their appeal as a safe haven after President Donald Trump threatened to retaliate against China's expansion of export controls on rare earths.

Trump accused China of "becoming very hostile" in a post on social media platform Truth Social and threatened a "massive increase" in tariffs on Chinese products coming into the U.S.

In the post, Trump also said he would no longer meet with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation forum in South Korea, because "now there seems to be no reason to do so."

Trump's post raised concerns about an escalation of the trade war between U.S. and China and the potential impact on the global economy.

In U.S. economic news, a report released by the University of Michigan this morning showed its reading on U.S. consumer sentiment was virtually unchanged in the month of October.

With most major U.S. economic data indefinitely postponed due to the government shutdown, next week's trading may be impacted by reaction to remarks by several Federal Reserve officials, including Fed Chair Jerome Powell.

Reports on consumer and producer price inflation, retail sales and new residential construction had originally been scheduled to be released next week.

The Bureau of Labor Statistics has revealed the report on consumer price inflation that had been due to be released next Wednesday will now be released on Friday, October 24th.

While no other releases will be produced until the resumption of regular government services, the BLS noted the consumer price index data allows the Social Security Administration to meet statutory deadlines