March 23, 2018 / 6:08 PM / 3 months ago

TREASURIES-Bonds choppy as trade war fears dominate

 (Adds quote, spending bill, data; updates prices)
    * Trump signs into law massive spending bill 
    * Capital goods orders rebounded in February
    * U.S. new home sales fell in February

    By Karen Brettell
    NEW YORK, March 23 (Reuters) - U.S. Treasury yields rose
from six-week lows on Friday in choppy trading as concerns about
a global trade war after President Donald Trump announced
tariffs on Chinese goods kept investors on edge.
    China urged the United States on Friday to "pull back from
the brink" after Trump said he planned tariffs on up to $60
billion in Chinese goods, and the Chinese commerce ministry
warned that the country "doesn't hope to be in a trade war, but
is not afraid of engaging in one."            
    Stocks markets fell globally as investors feared the impact
of tariffs on global growth. Treasuries benefited from safety
buying overnight, before weakening slightly on Friday as
investors evaluated future moves.
    “We keep going back and forth ... whether we’re going to
have a trade war or not have a trade war,” said Mary Ann Hurley,
vice president in fixed income trading at D.A. Davidson in
Seattle.
    Bloomberg News cited China’s ambassador to the United States
saying that the country is “looking at all options” in response
to tariffs, which could include scaling back purchases of
Treasuries.
    Benchmark 10-year notes            fell 3/32 in price to
yield 2.843 percent, after falling to a six-week low of 2.792
percent overnight.
    Trump on Friday signed into law Congress' massive $1.3
trillion spending bill, which is expected to worsen the deficit
and increase the government’s need to issue more debt.
            
    Data on Friday showed that new orders for key U.S.-made
capital goods rebounded more than expected in February after two
straight monthly declines and shipments surged, pointing to
strong growth in business spending on equipment in the first
quarter.             
    But sales of new U.S. single-family homes unexpectedly fell
for a third straight month in February, weighed down by steep
declines in the Midwest and West.             

 (Reporting by Karen Brettell
Editing by Leslie Adler)
  
 
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