U.S. 10-year Treasury yields skidded to new record lows Monday and had been set for their biggest one-day drop in a decade, as coronavirus panic held onto global markets and kindled fears that the global economy will tip into a recession.
As global stock exchanges slumped, investors fled headlong to bonds to hedge the economic trauma of the COVID-19, and oil plunged over 30% after Saudi Arabia ignited a price war with Russia.
The U.S. 10-year Treasury yield dropped to as low as 0.318%. It was last down 22 basis points and prepared for its biggest day by day slump since 2011 – when a sovereign debt crisis ragged across the eurozone.
Thirty-year Treasury yields had been last down 30 bps on the day, having reached a new record low at 0.70% as investors bet the Fed could be pressured to cut rates of interest by at least 75 basis points at its March 18 meeting, regardless of having recently delivered an emergency easing.
Two-year bond yields fell to 0.285%, their lowest since 2014. They’ve tumbled for 13 straight sessions.
As two-year U.S. bond rturms neared 0%, shorter-dated gains on British gilts became negative for the first time.
Five-year Treasury yields temporarily touched a record low during Asian trade at 0.325% and had been last down 12 bps on the day at 0.43%
As global stock exchanges and oil prices tanked, U.S. stock market futures suggested Wall Street was set for a defeat when they open later Monday.