U.S. Treasury curve inverts as virus outbreak fans growth fears

• The U.S. Treasury yield curve, measured by the gap between yields on three-month and 10-year bonds, briefly inverted on Tuesday for the first time since October as investors worried about the economic impact from a virus outbreak in China.
• An inverted curve, when longer-dated yields fall below shorter-maturity ones, has been a fairly reliable predictor of U.S. economic recessions in the past.
• The death toll from the coronavirus outbreak in China has risen to more than 100 and the virus has spread to more than 10 countries, including France, Japan and the United States. That has rattled world markets, fuelling concerns about the impact on a world economy hit last year by a trade war between the United States and China.
• Investors in turn have rushed into safe-haven U.S. Treasuries, with 10-year yields falling on Tuesday to 1.57% US10YT=RR, their lowest since early October.

(Source: Reuters)