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  • China’s 10-year bond yield fell to lowest since April 11.  
  • The flight to safety seems to have a pushed the yield lower.  

The escalating US-China trade tensions and the resulting risk aversion seems to have boosted haven demand for government bonds.  

China’s 10-year yield fell to 3.24% earlier today “” the lowest level since April 11 – and was last seen at 3.28%, down three basis points on the day.  

The futures on the S&P 500 fell more than 1% in Asia on trade standoff. On Saturday, President Trump warned China not to impose retaliatory tariffs, having hiked the tariff rate from 10% to 25% on $200 billion worth of Chinese goods on Friday.  

Meanwhile, China warned Trump on Sunday not to underestimate China’s endurance to fight a prolonged trade war. Further, China posted its own set off demands for talks including the removal of additional tariffs imposed on Friday.