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Treasuries Move Notably Higher Amid Renewed Trade Concerns

Treasuries showed a notable move to the upside during trading on Monday as traders looked for safe havens amid renewed trade concerns.

Bond prices gave back ground going into the close but remained firmly in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 2.50 percent.

The strength among treasuries came after President Donald Trump threatened to impose tariffs on all Chinese imports in a series of posts on Twitter on Sunday.

Trump said tariffs on $200 billion worth of Chinese goods would be increased to 25 percent on Friday and threatened to impose tariffs on the remaining $325 billion worth of Chinese goods "shortly."

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump tweeted, claiming the existing tariffs on Chinese goods have had "little impact on product cost, mostly borne by China."

The 10 percent tariff had been scheduled to rise to 25 percent at the end of last year, but the increase was delayed due to ongoing trade talks.

The tweets from Trump raised concerns about the outlook for the trade talks, although some suggested the threat is only a negotiating tactic.

Amid another quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to the results of the Treasury Department's auction of $38 billion worth of three-year notes.

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