Bond market selloff rumbles on ahead of Trump and XI talks - Reuters

Bond markets remained under pressure on Friday, extending a selloff that has pushed yields higher as investors await a highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping. The talks are expected to focus on trade relations between the world's two largest economies, a topic that has repeatedly swayed global risk sentiment over the past year.

The move reflects how fixed-income investors are positioning ahead of a potentially market-moving event. When expectations for progress on trade improve, investors often rotate out of safe-haven government bonds, lifting yields; when talks appear to stall, demand for those same bonds typically returns. The current selloff suggests markets are leaning toward the possibility of a constructive outcome, though conviction appears limited given how often prior negotiations have shifted direction.

For observers, the key question is whether any agreement or statement from the meeting produces a durable change in trade policy or merely a temporary pause. Bond yields are likely to react sharply to whatever emerges, and the broader read-through — for inflation expectations, central bank policy, and growth forecasts — will matter well beyond the headline itself.