Stock Sell-Off Triggers Decline in US Yields

Bond bulls just sent a friend request to Facebook Inc.The turmoil around the social media company — and technology stocks in general — has forced 10-year Treasury yields out of a 20-basis-point range that’s held since early February. The benchmark dropped as much as three basis points Wednesday to 2.74 percent, the lowest level since Feb. 6, following an eight basis-point drop Tuesday. The yield has broken below the key 50-day moving average for the first time since mid-December.

For those caught off-guard by the extent of the bond rally, the shift is “still not alarming but definitely worth watching current rates if equities can’t find their way home,” Jim Vogel, a strategist at FTN Financial Capital Markets, wrote Tuesday in a note. “As various tech and social media stories continue to get pummeled on a regular basis, however, trading at 2.805 percent and below is gaining ground.”

Source: Treasuries Finally Give In to Tech Turmoil – Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.