November 15, 2019 / 2:20 PM / 3 months ago

TREASURIES-Yields rise on fresh hopes of trade deal

    * Kudlow talks up trade talks
    * Retail sales data disappoints

    By Karen Brettell
    NEW YORK, Nov 15 (Reuters) - U.S. Treasury yields rose on
Friday as fresh hopes that the United States and China will
reach a deal to de-escalate their trade war boosted risk
appetite, and reduced demand for U.S. government bonds.
    The United States and China are getting close to a trade
agreement, White House economic adviser Larry Kudlow said on
Thursday, citing what he called very constructive talks with
Beijing about ending a 16-month trade war.             
    The comments come after several media reports indicated that
negotiators are struggling to reach a deal.
    The Financial Times reported on Thursday that the countries
are struggling to agree on issues including intellectual
property, agricultural purchases and tariffs.
    “Overnight, there were some positive trade headlines so you
had rates under a little bit of pressure, giving back some of
the gains this week,” said Justin Lederer, an interest rate
strategist at Cantor Fitzgerald in New York.
    Benchmark 10-year notes             were last down 5/32 in
price to yield 1.833%, up from 1.815% late Thursday.
    Bonds prices have gained this week as optimism over a trade
deal ebbed, retracing some of last week's dramatic selloff.
    Ten-year note yields             rose to 1.973% on November
7, which was the highest since August 1, and have climbed from
1.670% on November 1.
    Yields gave back some price losses on Friday after data
showed that U.S. retail sales rebounded in October, but
consumers cut back on purchases of big-ticket household items
and clothing, which could temper expectations for a strong
holiday shopping season.             
    The data was “all in all a little weaker than expected,”
Lederer said.

 (Editing by Nick Zieminski
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