FX.co ★ Treasury Yields Edge Up as Trade Uncertainty Mounts, ISM PMI Disappoints

On Monday, the yield on the US 10-year Treasury note surged past 4.4%, as traders confronted renewed trade uncertainty and an uptick in risk aversion due to disappointing economic data. The latest ISM Manufacturing PMI report revealed a steeper-than-expected contraction in the manufacturing sector, marking the third consecutive month of decline. A significant point of concern was the import component of the index, which plunged to its lowest point in 16 years, highlighting firms' substantial pullback in response to increasing tariff-related expenses. Concurrently, trade tensions were on the rise, with China accusing the United States of breaching their recent trade agreement and pledging retaliatory actions to protect its interests. This development followed accusations from President Trump the previous week, in which he asserted that China had violated the terms of the deal. In addition, tensions with the European Union escalated as Trump announced intentions to double tariffs on steel and aluminum to 50%, further heightening investor worries.