Treasury yields fall as US-China dispute resurfaces over coronavirus

U.S. government debt prices were higher Monday morning as Washington ramped up its criticism of China over the origin of the coronavirus pandemic.

At around 2:05 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.6052% and the yield on the 30-year Treasury bond was down at 1.2428%. Yields move inversely to prices.

U.S. Secretary of State Mike Pompeo on Sunday stepped up the administration’s claims that China intentionally concealed the severity of the outbreak in its infancy, while suggesting that there was “a significant amount of evidence” of the coronavirus originating in a Wuhan lab. However, he did not contest scientists’ conclusions that it was not man-made.

The comments came after President Donald Trump indicated that the initial trade deal signed between Washington and Beijing in January was now of secondary importance following China’s role in allowing the outbreak to spread.

The escalating tensions between the world’s two largest economies has offset cautious optimism over the gradual reopening of economies following weeks of shutdowns around the world, as the rate of new cases and fatalities slows in Europe and the U.S.

Cases in the U.S. have now topped 1.15 million, resulting in more than 67,000 deaths, according to Johns Hopkins University.

On the data front, March factory orders are due for release at 10 a.m. ET on Monday.

Auctions will be held Monday for $61 billion of 13-week Treasury bills, $50 billion of 26-week bills and $30 billion of 105-day bills.