Treasuries Extend Friday's Surge Amid Ongoing U.S.-China Trade Tensions

(RTTNews) - With trading resuming following the Columbus Day holiday on Monday, treasuries moved higher over the course of the trading day on Tuesday.

Bond prices gave back ground after an early advance but moved back to the upside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 4.022 percent.

The ten-year yield added to the 9.7 basis point plunge seen during last Friday's session, dropping to its lowest closing level in a month.

Treasuries extended the surge seen to close out the previous week amid concerns about ongoing trade tensions between the U.S. and China.

Asked about the dispute over China's expansion of export controls on rare earths, a spokesperson for China's Ministry of Commerce suggested the country was only responding to Washington's restrictions on Chinese firms.

"The U.S. has long overstated national security, abused export controls, and adopted discriminatory practices against China," the spokesperson said, according to Google translate.

They added, "In particular, since the Madrid trade talks between China and the U.S., the U.S. has continued to impose a series of new restrictive measures on China, which have seriously harmed China's interests and seriously undermined the atmosphere of the bilateral trade talks."

The spokesperson reiterated that China is willing to "fight to the end" if there is a trade war but said the "door is open" to trade talks.

Beijing has also announced sanctions against five U.S.-based subsidiaries of South Korean shipping giant Hanwha Ocean, accusing the firm of cooperating with Washington in its curbs on China's maritime sector.

Meanwhile, Federal Reserve Chair Jerome Powell spoke at the 67th Annual Meeting of the National Association for Business Economics in Philadelphia but did not provide much fresh insight into the outlook for interest rates.

Powell reiterated his belief that there is "no risk-free path" for monetary policy as the Fed navigates the tension between the central bank's dual goals of maximum employment and inflation at a rate of 2 percent over the longer run.