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  • Treasury yields rise to four-month highs despite escalating trade tensions.  
  • China’s Treasury holdings fell to six-month lows.  

The yield on the 10-year treasury note jumped to four-month highs on Tuesday amid escalating US-China trade war.

The benchmark yield rose to 3.06 percent yesterday – the highest level since May 23 – and was last seen at 3.045 percent.  More importantly, the yields rose even though the United States and China slapped a new round of tariffs on each other.

The Trump administration on Monday announced a 10 percent tariff on $200 billion worth of Chinese imports. Meanwhile, in retaliation, China has announced new tariffs on US imports worth $60 billion.

Meanwhile, the official data showed that China’s holdings of US Treasuries dropped to a six month low of $1.171 in July, from $1.178 trillion in June.  

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