Thirty-year US yield at record low on trade panic

Tuesday, 03. September 2019 16:43

The two-year United States Treasury yield touched 1.436% for the first time in nearly two years on Tuesday while the 30-year measure dropped to a historic low after another sign of a contraction in manufacturing and, even more so, threats from President Donald Trump that he would impose stricter conditions for a trade deal with China if he is reelected.

He also criticized Germany and the European Union for interest rate and currency policy and slammed the Federal Reserve, saying it "fails to act." Prices of Treasuries, conventional safe haven assets, rise when yields decline and vice versa.

The two-year yield nosedived 5.2 basis points to 1.46% at 10:41 am ET. The ten-year benchmark was down 4.8 points at 1.464% which means the most widely watched part of the yield curve wasn't inverted anymore, though remaining virtually flat. The rate touched 1.438%, close to a record low set in July 2016. The 30-year measure was down 3.8 points at 1.926% after dipping to 1.919%, the lowest ever on a closing basis. However, the long yield did come within a hair from 1.9% last week in intraday trading. Corresponding futures prices rallied 0.12%, 0.43% and 0.6%, respectively.

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