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US bonds rise on soft Chinese data, oil fears

U.S. sovereign bonds rose on Tuesday, as weak trade data from China fueled concerns about downward pressure on global growth, pushing investors towards so-called safe haven assets.

The yield on benchmark 10-year Treasury notes fell to 2.0627 percent on Tuesday, while the yield on 30-year bonds declined to 2.8983 percent. Bond yields have an inverse relation with bond prices.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Official data on Tuesday showed China's dollar-denominated exports fell 3.7 percent in September from a year earlier, while imports plunged 20.4 percent to chalk up their eleventh consecutive month of decline.

Safe haven assets like German bunds also rose on the news, while stocks and stock index futures across the world fell.

"Chinese exports were better-than-expected and imports were slightly worse, but both continued to decline in year-on-year terms," IG's market analyst, Angus Nicholson, said in a report on Tuesday.

In the U.S. on Tuesday, James Bullard, the president of the Federal Reserve Bank of St. Louis, said monetary policy in the U.S. "won't be tight for years," adding that emerging markets ahave had time to prepare for a Fed rate hike.

This comes after comments from various Fed officials over the past couple of days, with the centrist Dennis Lockhart reiterating the case for an interest rate lift-off this year, while Lael Brainard called for no change given downside risks.

The day will also bring the Treasury Budget for September, as well as the Democrat Presidential debate in the evening.

Equity traders will await quarterly earnings from Dow Jones components Intel and JP Morgan Chase. S&P 500 corporations are expected to post a 5.3 percent fall in third quarter 2015 earnings growth, the first third quarter decline in six years, according to consensus data from S&P Capital IQ. However, excluding the energy sector drag of a sharp -65.6 percent, S&P 500 earnings growth would be 2.7 percent.

The International Energy Agency reported on Tuesday that global oil demand growth would slow in 2016, to 1.2 million barrels per day from 1.8 million in 2015. Brent and WTI crude prices rose on Tuesday.