Treasuries Eye 2% as Trade Tension Spurs Increased Fed Cut Bets

 

• Treasuries are in the vanguard of a bull run in global bonds, bringing into sight the prospect of benchmark 10-year yields dropping to 2% for the first time since late 2016 as traders ramp up bets on monetary-policy easing by the U.S. central bank.
• Escalating U.S.-China trade tensions and faltering global growth have seen U.S. 10-year yields tumble almost 40 basis points since mid-April to as low as 2.22% on Wednesday, May 29.
• The gap between the three-month and 10-year American yield fell as low as minus 12 basis points, the most since negative 2007, while fed funds futures showed about three quarter-point central bank cuts priced in by the end of next year.

(Source: Bloomberg)