SPTL - Treasury yields slide with the rate-sensitive US2Y slipping as much as 51 bps

2023-03-15 15:27:27 ET

The shorter-end 2-year Treasury yield ( US2Y ) on Wednesday slipped as much as 51 basis points to a session low of 3.72%, as investors fled to safe-haven assets such as bonds and gold and away from equities on rekindled financial sector jitters.

U.S. stocks fell on Wednesday, roiled by fresh concerns surrounding the global financial system after a slump in shares of Credit Suisse ( CS ) sent ripples throughout European markets.

The longer-end 10-year Treasury yield ( US10Y ) fell as much as 25 basis points to a session low of 3.39%.

The US2Y and the US10Y had advanced on Tuesday and had snapped a five-day losing streak each amid a broader rebound in the financial sector.

The US2Y has been on something of a roller-coaster lately. It crossed the 5% level at the beginning of last week, marking a high not seen since 2007.

It has been on a sustained decline since, as financial sector jitters spurred by the collapse of Silicon Valley Bank (SVB) and Signature Bank ( SBNY ) have led to investors moving into safe-haven assets. The US2Y closed at 5.07% on March 7 and settled at 4.30% the day before, marking a fall of 77 basis points.

With the fall in Treasury yields on Wednesday, bond prices have tracked higher, as the two move in opposite directions. In turn, exchange traded funds ((ETFs)) related to the bond market have advanced:

Direxion Daily 20+ Year Treasury Bull 3X Shares ( TMF ) +6.09% , iShares 20+ Year Treasury Bond ETF ( TLT ) +1.89% , SPDR Portfolio Long Term Treasury ETF ( SPTL ) +1.92% , Vanguard Long-Term Treasury ETF ( VGLT ) +1.68% , iShares 10-20 Year Treasury Bond ETF ( TLH ) +1.80% , iShares 7-10 Year Treasury Bond ETF ( IEF ) +1.41% , iShares U.S. Treasury Bond ETF ( GOVT ) +1.15% .

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