US government debt prices edged higher on Friday over continuing fears of the US-China trade war and its impact on financial markets worldwide. The yield on the 10-year Treasury note fell to 2.1731% while the yield on the 30-year Treasury note touched 2.6150%.

Even as trade tensions with China show no signs of abating, US President Trump announced a 5% tariffs on Mexican imports from June 10. Investors are concerned about what these new duties mean for the USMCA trade deal which is awaiting ratification.

Markets have turned their attention to US bond markets for clues on economic climate. As bond yields on long term debt falls below that of the short term bond yields, there is worry that this yield inversion is signalling a potential recession in the US economy in the near future.