US Yields Flat after ECB Prolongs Low Rates

The U.S. Treasury yield curve flattened on Thursday as the European Central Bank committed to leaving interest rates steady into the first half of 2020, while major world stock indexes were mixed following U.S. President Donald Trump’s fresh tariff threat against China.

The ECB’s move was less aggressive than what some traders had expected and led to selling in shorter-dated German government debt, which in turn spilled over into shorter U.S. Treasury maturities, traders and analysts said.

Much of the yield curve flattened, coming off its steepest level in seven months the previous day. The gap between two-year and 10-year yields narrowed by 2.6 basis points to 25.10 basis points.

German 10-year yields tumbled to a record low of -0.240% before retracing to -0.220%. Benchmark 10-year notes last rose 6/32 in price to yield 2.1036%, from 2.123% late on Wednesday.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza