Treasury yields move lower on increased U.S.-China tension

U.S. government debt prices were higher Friday morning on concerns over new instability in Hong Kong and increasing tensions between Washington and Beijing.

At 2:30 a.m ET, the yield on the benchmark 10-year Treasury note was trading lower at 0.6428% and the yield on the 30-year Treasury bond was also moving lower at 1.3517%. Yields move inversely to prices.

Investors are reacting to the latest news that China is set to impose a new national security law on Hong Kong, which could spark further anti-government protests. Beijing’s control over the city will likely evoke the ire of the U.S. and other Western powers which supported pro-democracy protesters.

In addition, China has said that it will not set a growth target for 2020, given the uncertainty sparked by the Covid-19 pandemic.

There are no economic data releases, Fed speeches or Treasury auctions Friday as the U.S. heads for an extended weekend to commemorate Memorial Day on Monday.