U.S. government debt yields rose on Tuesday after Chinese President Xi Jinping alleviated some trade war fears and producer price data came in hotter than Wall Street expectations.
The yield on the benchmark 10-year Treasury note was higher at around 2.81 percent at 8:43 a.m. ET, while the yield on the 30-year Treasury bond was higher at 3.037 percent. Bond yields move inversely to prices.
Concerns over a potential trade war between the U.S. and China have been alleviated somewhat after Chinese President Xi Jinping discussed plans Tuesday to further open up the country's economy, with measures including lowering import tariffs on autos, enforcing legal intellectual property of foreign groups and reducing duties on other consumer products.
Xi's address appeared to boost market sentiment Tuesday, with markets in Europe and Asia trading higher during their respective sessions. U.S. futures also posted sharp gains.
U.S. producer prices increased more than expected in March, buoyed by rising health care costs and airline fees, suggesting a buildup of wholesale inflation.
The Labor Department said on Tuesday its producer price index for final demand rose 0.3 percent last month after increasing 0.2 percent in February. The so-called core PPI that excludes food, energy and trade services rose 0.4 percent last month.
Core PPI increased 2.9 percent in the 12 months through March, the biggest increase since August 2014, according to Reuters.
It was "generally a healthy print which shows price pressures at the producer level," wrote Aaron Kohli, interest rate strategist BMO Capital Markets. "What remains to be seen with tomorrow's CPI is if such gains are yet being passed onto consumers or whether such effects are mostly being absorbed by producer margins."
The Labor Department's consumer price index is due tomorrow at 8:30 a.m. in New York.
