Treasuriesfell overnight and into the open as the 10-Year yield breached 3.00% for the third straight day after President Trump formally announced a fresh round of tariffs on $200 Billion more Chinese goods late yesterday. The trade rhetoric has been developing for months, and many investors have priced in rising tensions which alleviated some of the pressure on assets from the latest escalation of the trade war. The new round of tariffs, which will be a 10.00% imposition, is set to begin on September 24, but would significantly increase to 25.00% in January if the two sides cannot agree to end their trade dispute within that time frame. President Trump added that he would impose more tariffs on another $267 Billion of Chinese goods should China retaliate. Still, China's Ministry of Commerce quickly responded by stating that it will impose tariffs on $60 billion of U.S. goods beginning this month.
On the economic calendar, we received the September NAHB Housing Market Index which remained unchanged from the previous month at 67.00 while consensus expected a slight drop to 66.00. The confidence among homebuilders continues to stabilize as demand held up in September. Later today at 1:00 PM (EST), the July Total Net TIC Flows and Net Long-Term TIC Flows prints will be released. Elsewhere, the Bank of Japan began their meeting and will announce their latest monetary policy decision overnight just before the start of the U.S. session on Wednesday.
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