Treasury yields jumped on Friday as the Federal Reserve stepped up its stimulus measure to counter signs of market dysfunction in the face of the spreading coronavirus.
Treasurys
TICKER COMPANY YIELD CHANGE %CHANGE
US 3-MO U.S. 3 Month Treasury 0.287 -0.04 0.00
US 1-YR U.S. 1 Year Treasury 0.38 0.021 0.00
US 2-YR U.S. 2 Year Treasury 0.508 0.019 0.00
US 5-YR U.S. 5 Year Treasury 0.731 0.079 0.00
US 10-YR U.S. 10 Year Treasury 0.983 0.131 0.00
US 30-YR U.S. 30 Year Treasury 1.597 0.186 0.00
The yield on the benchmark 10-year Treasury note, jumped 15 basis points to slightly above 1%. The yield on the 30-year Treasury bond soared 19 basis points to at 1.60%.
The move in yields came after President Donald Trump declared a national emergency over the coronavirus pandemic, and announced a set of specific measures aimed at stemming the effects of the outbreak.
The declaration will free up as much as $50 billion in financial resources to efforts by states and U.S. territories to assist Americans affected by the outbreak.
Yields also edged higher following the Federal Reserve’s announcement of its bond-buying program as part of its efforts to help the financial system through the coronavirus scare.
The central bank said Friday it will start buying Treasurys across all durations, starting with the 30-year note. Yields at the long end of the curve jumped following the announcement.
In addition to the new round of bond purchases, the Fed also previously detailed a series of longer-term repo operations that could amount to $1.5 trillion. Repo involves banks swapping high-quality assets for reserves they use to fund daily operations.
Investors returned to risk assets on optimism that a stimulus deal is on the horizon. House Speaker Nancy Pelosi said U.S. lawmakers and the White House were close to a deal on economic relief amid the coronavirus outbreak. “We’ve resolved most of our differences,” Pelosi told reporters Thursday.
Global central banks also ramped up their easing measures. The Bank of Japan injected 500 billion yen as a response to the global market sell-off. Norway’s central bank cut rates by 50 basis points and the Bank of Korea was reportedly in talks over a possible emergency rate cut.
Stocks on Thursday suffered their worst day since the “Back Monday” in 1987. The S&P 500 plummeted 9.5% Thursday in its worst day in more than three decades, joining the Dow in a bear market, or more than 20% from its recent peak. The Dow also suffered its worst point drop ever and the biggest percentage decline since 1987.
The coronavirus has now infected more than 135,000 people worldwide, with nearly 5,000 deaths, according to the latest figures from Johns Hopkins University.
In the U.S., 1,663 cases have been confirmed with 40 deaths, and top infectious disease expert Anthony Fauci told a House Oversight meeting on Thursday that the U.S. testing system is “failing.”