US Treasury yields climb after manufacturing report reveals better-than-expected expansion

  • The Institute for Supply Management said its manufacturing index rose to 61.3 in August from 58.1 in July, the metric's fastest rate of expansion since 2004.

U.S. government debt yields rose on Tuesday after a report showed that the manufacturing sector expanded faster than expected in August and the economy grew for the 112th straight month.

The Institute for Supply Management said its manufacturing index rose to 61.3 in August from 58.1 in July, the metric's fastest rate of expansion since 2004.

The report also found that new orders and employment picked up throughout the month, affording investors an upbeat sign for the economy at the start of a typically turbulent month on Wall Street.

The unemployment rate slipped below 4 percent this spring, with forecasters expecting strong economic growth this year thanks to Trump administration's tax cuts and elevated consumer sentiment.

The yield on the benchmark 10-year Treasury note was higher at around 2.9 percent at 3:19 p.m. ET, while the yield on the 30-year Treasury bond was up at 3.066 percent. Bond yields move inversely to 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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Reopening after the Labor Day holiday, U.S. markets are largely attuned to developments surrounding trade friction.

Last week, the U.S. and Canada failed to secure an agreement to replace the current NAFTA pact by the Friday deadline. While a deal has been arranged with Mexico, President Donald Trump tweeted over the weekend that there was "no political necessity to keep Canada in the new NAFTA deal."

Trump added that Congress shouldn't intervene in the talks, and claimed that if it did, he would "simply terminate NAFTA entirely." Trade talks with Canada are however expected to reignite this week.

Also last week, a Bloomberg report suggested that the U.S. administration was on standby to inflict additional levies on $200 billion worth of Chinese goods as soon as this week. In an interview with the same media outlet, Trump warned that he would consider removing the U.S. from the World Trade Organization (WTO) if it doesn't "shape up."

Investors are also keeping an eye on emerging markets.

In Turkey, the lira has lost at least 40 percent of its value in 2018 over concerns surrounding President Recep Erdogan's policies and the economy.

And the Argentinian government asked the International Monetary Fund (IMF) for an early release of funds from the nation's $50 billion standby financing deal — a move that surprised markets and put the peso under pressure.