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U.S. Treasury yields surged to more than three-month highs on Thursday, exaggerated by technical factors, as reports that a U.S.-China agreement to roll back trade tariffs boosted global economic growth expectations.

Tariffs imposed during the months-long bilateral trade war will be phased out, the Chinese commerce ministry said on Thursday, without specifying a timetable.

An interim trade deal is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cellphones, laptop computers and toys.

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“Global markets in general are looking towards where trade goes,” said Justin Lederer, an interest rates strategist at Cantor Fitzgerald in New York.

Trade tariffs have been blamed for slowing global growth and their removal would provide a considerable boost to risk appetite. But with no deal confirmed, analysts attributed much of the bond sell-off to momentum as yields broke above technical resistance.

“There is no new information that justifies this scale of a sell-off,” said Jon Hill, an interest rate strategist at BMO Capital Markets in New York. “What we saw throughout the morning was a series of core technical supports get breached, and then the price action began to feed upon itself.”

Benchmark 10-year note yields rose to 1.973 per cent, the highest since Aug. 1, before falling back to 1.942 per cent. They are up from 1.812 per cent late Wednesday.

The yield increases accelerated once they broke above 1.908 per cent, which was an interim high reached in September.

The backup in yields helped attract buyers to the Treasury Department’s auction of $19 billion in 30-year bonds, which saw strong demand from fund managers and central banks.

It was the final sale of $84 billion in coupon-bearing supply this week. The government also sold $27 billion in 10-year notes on Wednesday to strong demand and $38 billion in three-year notes on Tuesday to solid demand.

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Investors are watching economic data for further clues on whether the Federal Reserve is likely to make further interest rate cuts.

The U.S. central bank cut rates last week for the third time this year and indicated that additional rate decreases may be unlikely in the near term.

The next major U.S. economic release will be consumer price data for October released next Wednesday.

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