Short-term U.S. government debt yields fell Wednesday after Hong Kong leader Carrie Lam said a controversial extradition bill that sparked mass protests within the city has been withdrawn.
The yield on the benchmark 10-year Treasury note held steady at 1.456%, while the yield on the 30-year Treasury bond hovered at 1.958%. The 2-year Treasury rate, however, fell 3 basis points to 1.428%, its lowest level since 2017.
The total withdrawal of the extradition bill is expected to ease tensions between the government and the scores of protesters, fostering a risk-on pivot on Wall Street. Some investors saw the Hong Kong protests as disruptive to the global economy and a potential threat to U.S.-China trade discussions.
Lam made a public announcement Wednesday saying that the government had responded to each of the demands but admitted that it "may not be able to address all the grievances of people in society.
Still, market focus centered on global trade developments, after the U.S. and China imposed new tariffs one another's goods at the start of the month. It marked the latest escalation in a long-running trade war between the world's two largest economies.
Data on Wednesday showed growth in China's services sector had expanded at its fastest rate in three months in August, despite broader economic headwinds.
The Caixin/Markit Services Purchasing Managers' Index (PMI) came in at 52.1 in August — its highest reading since May. The 50-mark in PMI readings separates growth and contraction.
Sticking in Asia, Hong Kong leader Carrie Lam is expected to announce the formal withdrawal of a proposed extradition bill that has sparked months of protests in the Chinese-ruled city, Reuters reported, citing the South China Morning Post and other sources.