U.S. Treasury yields climbed Wednesday as President Donald Trump suggested he could be close to striking a trade deal, contributing to stock gains and weighing on demand for haven assets. Investors had been fleeing risky assets late Tuesday after the leader of the House said she would support an impeachment inquiry against Trump.

What’s are Treasurys doing?

The 10-year Treasury note yield

TMUBMUSD10Y, +4.34%

 surged 9 basis points to 1.725%, while the 2-year note rate

TMUBMUSD02Y, +4.95%

 was up 8.3 basis points to 1.677%. The 30-year bond yield

TMUBMUSD30Y, +3.29%

 picked up 7.9 basis points to 2.174%.

What’s driving Treasurys?

The bond market came under pressure after President Donald Trump said a China trade deal could happen “sooner than you think.” Investors have seen some tentative signs that trade tensions have begun to thaw, including news reports saying Chinese firms have ramped up their purchases of U.S. soybean and pork imports.

Stocks bounced back on the trade optimism, with the S&P 500

SPX, +0.59%

and the Dow Jones Industrial Average

DJIA, +0.63%

 heading higher in Wednesday afternoon action.

The selloff dampened the results of a bond auction for $41 billion of 5-year notes. The debt sale tailed by 0.8 basis point, a sign that the bond sale struggled to draw sufficient demand. The tail is the amount by which the highest yield the Treasury sold in the auction exceeds the highest yield expected when the auction began.

House Speaker Nancy Pelosi’s endorsement of an impeachment inquiry into President Donald Trump on Tuesday initially sparked an overnight rally in government bonds as investors added to the list of political risks afflicting Wall Street, but analysts said Democrats would struggle to push impeachment through a Republican-controlled Senate.

See: Why Trump impeachment threat is rattling stock-market investors — at least for now

Several Federal Reserve speakers spoke on Wednesday. Chicago Fed President Charles Evans said the central bank was “well positioned” going forward. Dallas Fed President Robert Kaplan will deliver an economic update later at 7 p.m.

In economic data, U.S. new home sales for August jumped 7.1%, running at an annualized pace of 713,000.

What do market participants’ say?

“Investors are determined to trade everything President Trump says about trade. [Yesterday] was the stern U.N. address that signaled risk avoidance. This morning was an opposing reaction, led by stocks, to his comment we might be surprised how quickly a deal comes together.,” wrote Jim Vogel, an interest-rate strategist at FTN Financial.

What else is on investors’ radar?

Short-term Japanese bond yields tumbled after Bank of Japan Gov. Haruhiko Kuroda said the central bank may cut interest rates further. The 5-year Japanese government bond yield fell to a record negative 0.39%, and was last seen trading at negative 0.38%, Tradeweb data show.

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