The Wall Street Journal confirmed on Thursday that China accepted the US trade negotiations for a new round of face-to-face talks in Beijing following efforts to reach at least a minimal agreement.
Although standards for a trade deal that blows risky assets worldwide dropped, the expected safe-haven bond yields were significantly higher.
According to Sergio Capaldi, a fixed-income analyst at Intesa Sanpaolo, the move to increase bond yields is a bit puzzling because they believe that the prospects of a trade deal have dropped significantly and that a new leap should be seen in the global bond rally.
Phase One of the trade deal could be completed by next year, said trade analysts as well as white-house-oriented individuals, as Beijing is pushing for more tariff protection and the U.S. is countering its growing demands.
The euro area was significantly higher after slightly higher U.S. yields. Returns from the treasury have been seen overnight. German 10-year bond returns increased more than 1 bps to -0,3390 percent, widely regarded as a benchmark in the euro area, rising above a low of -0,3840 percent on Wednesday for three weeks. The latest benchmark interest rate in the eurozone, the ESTR rise overnight, was also a factor weighing the feeling.
Wednesday’s ESTR price increase was the largest daily interest rate leap on the money market since it was introduced by the European Central Bank in early October.
The Fed released the minute of the policy meeting at the end of October, which disclosed that the central bank was deeply divided and agreed to pause after a rate cut at the meeting in their easing process.
Later on, Thursday, investors will see a preview of the euro area’s consumer confidence index. The index was forecast by Reuters economists to strengthen marginally from -7.6 in October to -7.3.