U.S. Treasury yields demonstrated mostly a downward trajectory on Tuesday as investors tracked the second day of U.S.-China trade talks in London.
The benchmark 10-year Treasury yield declined by nearly two basis points to 4.470% as of 15:09 GMT. Longer-dated bonds followed suit, with the 30-year yield down almost two basis points to 4.937%. Meanwhile, the 2-year yield, more sensitive to interest rate expectations, showed a slight increase of approximately one basis point, reaching 4.008%. (For context, a basis point represents 0.01%, and bond yields and prices operate inversely.)
The ongoing U.S.-China negotiations in London mark a crucial step in the attempt to resolve the escalating trade dispute between the world's two largest economies. This round of talks follows a recent high-level phone call between U.S. President Donald Trump and his Chinese counterpart Xi Jinping.
On Monday, a delegation comprising Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer held initial discussions with China's negotiating team. U.S. Commerce Secretary Lutnick offered an optimistic assessment on Tuesday, indicating that the talks were "going well" and characterised by extensive engagement between the two sides.
The intensified diplomatic push comes after months of rising trade tensions and market volatility triggered by U.S. President Donald Trump's imposition of wide-ranging import tariffs on Chinese goods and other key trading partners in April.