07.04.202519:21:00UTC+00Treasuries Pull Back Sharply Following Two-Day Surge

Treasuries showed a substantial move to the downside during trading on Monday, giving back ground after moving sharply higher over the two previous sessions.

Bond prices moved lower early in the session and slid more firmly into negative territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 17.0 basis points to 4.155 percent.

The pullback by treasuries largely reflected profit taking following the surge last Thursday and Friday in reaction to President Donald Trump's new tariffs and retaliatory moves by U.S. trade partners.

The ten-year yield showed a significant rebound after plunging by 21.1 basis points over to the previous sessions to hit its lowest closing level in six months.

Traders largely shrugged off concerns about a global trade war even as Trump threatened to impose an additional 50 percent tariff on Chinese goods unless the country withdraws its new 34 percent tariff on U.S. goods.

Trump also threatened to terminate negotiations with China even as he said administration is in talks with "countries from all over the world" and "tough but fair parameters are being set."

White House National Economic Council Director Kevin Hassett claimed in an appearance on ABC's "This Week" that more than 50 countries have reached out to Trump to begin negotiations.

Amid another quiet day on the U.S. economic front, trading on Tuesday may continue to be drive by reaction to the latest news of the tariff front.