Treasury Action: yields have continued to richen in cautious trading
Treasury Action: yields have continued to richen in cautious trading. Again China tariff uncertainties are the main issue in an otherwise mundane session. The long end is leading the way with the 30-year 4.8 bps lower at 2.252%. The 10-year rate has fallen 3.8 bps to 1.777%, with the 2-year off 0.6 bps to 1.592%. The break of the 2.30% level on the 30-year, the 1.80% on the 10s, and and 1.60% on the 2s added some impetus to the richening. The bond and note have not closed below 2.30% and 1.80%, respectively, since November 4. Wall Street is mixed with the Dow -0.35% lower while the S&P 500 is flat and the NASDAQ up 0.25%. With a lot of the rally in equities premised on at least a Phase One agreement, reports that suggest more of a divide between the two sides is pressuring equities. A story in the Global Times indicated there is a "long way to go," and reiterated speculation that China will employ a "strategic patience" approach. Passage of Hong Kong Human Rights and Democracy Act could also intensify U.S-China frictions. Poor earnings from Home Depot and Kohls are also factoring into the drop in the Dow.