The return on year notes briefly fell below 4% for the first time since last October and then lost 53.1 basis points (bp) to 4.057%.. The two-year yield, which reflects expectations for rate moves, marked its biggest daily decline since September 2008, during the global financial crisis.
It also posted its biggest three-day decline of 97bp since the “Black Monday” stock crash of 1987. Yields move inversely with prices.
The two-year/10-year yield curve also narrowed sharply on Monday, trimming its investment to -57.40bp as investors lowered rate hike expectations. That is the narrowest gap since early January. It then settled at -58.10 bps.
US banking regulators pledged on Sunday to ensure Silicon Valley Bank depositors have access to their funds and set up a new line to give banks access to emergency funds. The Federal Reserve also made it easier for banks to ask it for money in an emergency. On Monday, HSBC said it would acquire the UK unit of SVB.
“What we saw from the Fed was quick and correct intervention, putting some circuit breakers in the system. Is that enough to stop a price review? No,” said Guy Miller, chief market strategist at Zurich Insurance Group in Switzerland.
In light of the crisis, Goldman Sachs forecast that the Fed would not raise rates at its meeting next week, helping fuel a big rally in short-term government debt on Monday.
Meanwhile, the 10-year Treasury return fell 17 bp to 3.524%, after falling back to 3.418%, the lowest level since February 3.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
