TREASURIES-Yields rise as US/China deal on trade punishes safe-havens

LONDON, May 12 (Reuters) - U.S. Treasury yields rose on Monday after the United States and China agreed to lower trade tariffs on one another during a 90-day pause, triggering a rush of investor cash into risk assets and hitting safe havens like bonds, the yen and the Swiss franc.

The world's two largest economies said in a joint statement that they had reached a deal to impose a 90-day pause on tariffs and reciprocal duties would drop sharply, giving investors some confidence that a full-scale trade war may have been averted.

U.S. Treasury Secretary Scott Bessent, speaking after talks with Chinese officials in Geneva, told reporters the two sides had reached the deal that was outlined in a joint statement and that reciprocal rates would drop by 115 percentage points.

The yield on the benchmark U.S. 10-year note rose as much as 7.2 basis points in European trading to a one-month high of 4.447% as prices fell, before retreating modestly to 4.439%, showing a 6.4 bp rise on the day.

"There is a de-escalation between China and U.S...It's a clear vote by the market in favour of riskier assets. It's a step in the right direction and a positive for U.S. assets and U.S. economy," said Kenneth Broux, senior strategist FX and rates at Societe Generale.

The 10-year yield is still well above where it was prior to Trump's April 2 "Liberation Day", when he unveiled a flurry of tariffs on U.S. trading partners. At that point, 10-year yields were at 4.15%. (Reporting by Amanda Cooper and Medha Singh; Editing by Kirsten Donovan)