US Treasury yields lower amid weaker housing data, trade concerns


U.S. government debt yields fell on Wednesday amid weaker-than-expected housing data and following President Donald Trump's Tuesday comments that there is still a "long way to go" on trade talks with China.

At around 4:00 p.m. ET, the yield on the benchmark 10-year Treasury note , which moves inversely to price, was lower at around 2.052%, while the yield on the 2-year Treasury note yielded 1.82%.

The Commerce Department said in a report on Wednesday that U.S. homebuilding fell for a second straight month in June and permits slumped to a two-year low, hinting at a softer housing market despite lower mortgage rates.

The government said that housing starts decreased 0.9% to a seasonally adjusted annual rate of 1.253 million units last month as a plunge in multi-family homebuilding dragged on the data. The sector has hit a soft patch in recent quarters and likely subtracted from GDP in the second quarter.

Builder confidence, meanwhile, ticked up just one point in July to 65, according to a Tuesday report from the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

"Builders report solid demand for single-family homes. However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes," said NAHB Chairman Greg Ugalde, a homebuilder and developer from Torrington, Connecticut.

Trade worries have also kept Treasurys in demand after President Donald Trump raised doubts on the trade progress between China and the U.S. and renewed threats to slap tariffs on another $325 billion of Chinese goods.


Elsewhere, Federal Reserve Chairman Jerome Powell said Tuesday that the central bank will "act as appropriate" in ensuring economic expansion.

"We are carefully monitoring these developments and assessing their implications for the U.S economic outlook and inflation, and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective," Powell said in Paris.

The central bank is widely expected to cut its overnight lending rate later this month amid persistent global growth fears, trade turbulence and lagging inflation.

— CNBC's Silvia Amaro contributed reporting.