10-year Treasury yields continue to languish below 2.40% today
And it is flirting with lows last seen in late 2017. That's the reason why risk assets continue to be kept on edge and why the yen is the top performer to start the day. It's not just Treasury yields that are the ones falling, earlier Australia's 3-year bond yields fell to historic lows while yesterday we saw 10-year bund yields sink deeper into negative territory.
Unless markets are actually pricing in real risks of a global recession, at some point the bond rally here has to stop. Optimism from US-China trade talks may just be the tonic that risk assets need but it doesn't look like that is going to come by any time soon.
Considering that sentiment, expect the 'bonds vs equities' debate to be a key one not just this week, but throughout the whole of this year. This is only just the beginning.
