U.S. government debt prices were slightly lower and yields higher on Thursday as investors monitored U.S.-China trade talks.
Market focus is largely attuned to global trade developments, following a media report suggesting the world's two largest economies were on the cusp of signing a so-called "phase one" trade deal.
Chinese Commerce Ministry spokesman Gao Feng said Thursday the two sides remain in close communications regarding trade. Gao did not, however, give any details on how the negotiations were proceeding. He added that China "believes if both sides reach a phase-one agreement, relevant tariffs must be lowered."
A Bloomberg report, which cited people familiar with U.S.-China trade talks, said both countries were inching closer to securing an agreement on the amount of tariffs that would be rolled back in a limited trade deal. President Donald Trump also said Wednesday that he believed trade talks with Beijing were going "very well."
Market participants are closely monitoring the prospect of a limited trade agreement with 10 days to go before Washington is poised to impose even more tariffs on Chinese goods. Dec. 15 is the date when tariffs on another $156 billion in Chinese goods would go into effect.
The U.S. Treasury is set to auction $40 billion in four-week bills and $35 billion in eight-week bills on Thursday.