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Treasury yields drop on China data and risk aversion

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Long duration Treasury note prices rallied, pushing the yields lower after China data reignited fears of slowdown in world’s second largest economy and triggered a flight to safety.

    At the time of writing, the yield on the benchmark 10-yr Treasury note was down more than 7 basis points at 1.827%. The 30-yr yield was down almost 8 basis points at 2.624%.

    Long duration treasury notes are more sensitive to the risk-on/risk-off. Meanwhile, 2-yr Treasury note, which mimics short-term rate hike expectations, was down more than 3 basis points at 0.874%.

    Moreover, the financial market instability acts as a roadblock in Fed’s plans to hike rates. Consequently, 2-yr Treasury note also took a hit.

    China data released earlier today showed imports tanked 13.8% y/y in Feb. Exports tanked 25.4% y/y as well.
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