TREASURIES-Trump's 'no deadline' trade comment drives down U.S. yields

BOSTON, Dec 3 (Reuters) - U.S. Treasury yields fell on Tuesday, as tough trade talk from U.S. President Donald Trump and other world leaders triggered a flight to safety among investors.

The benchmark 10-year yield was 11 basis points lower at 1.728% in morning trade on reduced investor appetite for risk, set for its largest daily decline since Aug. 8.

Other global financial measures including European bond yields and U.S. stocks fell Tuesday after Trump said he had no deadline for reaching a trade agreement with China, adding it could come after the 2020 U.S. election.

He also hinted at new trade-related taxes on French goods.

“It’s global risk-off due to the trade uncertainty,” said Michael Pond, head of global inflation-linked research at Barclays. “The move lower in yields today is part of a global risk-off sentiment,” he said.

The two-year yield, which typically moves in step with interest rate expectations, was down 7.6 basis points to 1.538% on Tuesday. Pond said that could reflect some anticipation of pressure on the U.S. Federal Reserve to further cut rates at some point. The two-year made its largest daily decline since Oct. 31.

Investors have been hoping the United States and China can defuse their trade tensions, which have strained ties between the world’s two biggest economies since 2017, the first year of Trump’s presidency.

U.S. officials have previously said a deal could happen this year, depending on China. But speaking in London on Tuesday Trump said a trade agreement might have to wait until after the U.S. presidential election in November 2020.

“I have no deadline, no,” Trump told reporters in London, where he was due to attend a meeting of NATO leaders.

Another reason for trade pessimism came when France and the European Union said they were ready to retaliate if Trump acts on a threat to impose duties of up to 100% on imports of champagne, handbags and other French products worth $2.4 billion.

On Tuesday Trump also said there might be substantial taxes on French goods if the United States and France failed to find an agreement in a trade dispute over France’s plans for a digital tax. (Editing by David Gregorio)