Treasury yields fall amid reports US-China trade talks have resumed

U.S. government debt prices rose on Tuesday amid reports that Treasury Secretary Steven Mnuchin has resumed trade talks with his Chinese counterpart.

The yield on the benchmark 10-year Treasury note fell to around 3.162 percent, while the yield on the 30-year Treasury bond dipped to 3.368 percent. Bond yields move inversely to prices.

The Wall Street Journal and Bloomberg News reported that Mnuchin and Chinese Vice Premier Liu He had returned to the negotiating table, speaking over the phone on Friday. That news came after a separate report that said President Donald Trump intends to meet with his trade team on Tuesday to discuss a draft report on European auto tariffs. Worries around a simmering trade dispute between the two have put investors on edge as of late.

Investor sentiment has also been shaken in recent weeks on fears that the Federal Reserve may be tightening too quickly. The U.S. central bank is expected to hike interest rates in December, and to follow up with two extra rate rises next year. President Trump has criticized the institution for taking this trajectory, going as far as to call it “crazy” for doing so.

In election news, Trump on Monday urged Florida election officials to end a recount of last week’s midterm vote and to declare victory for fellow Republican politicians in the disputed state races. Elsewhere, Democrat Kyrsten Sinema won the closely contested Arizona Senate race.

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As for economic data, Federal budget data and senior loan officer survey figures are due today at 2 p.m. ET.

Meanwhile, Tuesday is a busy day for Treasury auctions, with $50 billion worth of 4-week bills, $30 billion in 8-week bills, $45 billion in 13-week bills and $39 billion in 26-week bills set to be auctioned.