U.S. Treasuries slump after White House officials seen divided over imposition of harder tariffs on China

The U.S. 10-year Treasuries slumped during European trading hours Friday after mild signs of cooling trade war between the United States and China were observed, as White House officials remain divided over a harder action on the latter, keeping in mind the widening trade gap between the two major economies of the world.

The yield on the benchmark 10-year Treasuries jumped 1-1/2 basis points to 2.91 percent, the super-long 30-year bond yields surged nearly 1-1/2 basis points to 3.05 percent and the yield on the short-term 2-year traded 1 basis point higher at 2.55 percent by 12:00GMT.

Some White House officials are trying to restart talks with China to avoid a trade war before U.S. tariffs on Chinese products take effect July 6, three people familiar with the plans said, setting up a battle with others in the administration who favor a harder line.

Staff of the National Economic Council have contacted former U.S. government officials and China experts in recent days to gauge chances for high-level talks in the next two weeks, the people said on condition of anonymity to discuss the inquiries. One idea NEC staff floated was inviting Chinese Vice President Wang Qishan before the tariff deadline, Bloomberg reported.

In the US, the week will end uneventfully, with only the flash June Markit manufacturing and service sector PMIs, which typically attract much less market attention than their European counterparts, scheduled for release. 

Meanwhile, the S&P 500 Futures rose 0.54 percent to 2,767.50 by 12:10GMT, while at 12:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -40.97 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex