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China virus fears fuels bond yield drop; yuan tumbles

Published 01/30/2020, 04:00 PM
Updated 01/30/2020, 04:08 PM
© Reuters. China virus fears fuels bond yield drop; yuan tumbles
DE10YT=RR
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US3MT=X
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US10YT=X
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LONDON, Jan 30 (Reuters) - The rising death toll from a
virus spreading in China sent investors scurrying to the shelter
of perceived safe-haven assets including government debt and the
Japanese yen on Thursday, while China's yuan tumbled.
Safe-haven U.S. and German government bond yields fell
sharply, reflecting concern about the rapid spread of cronavirus
and its impact on the global economy.
As U.S. 10-year Treasury yields fell to 1.55% US10YT=RR ,
their lowest levels since early October, the yield curve - as
measured by the gap between 10-year and three-month note yields
inverted again US3MT=RR .
In the euro zone, Germany's benchmark 10-year Bund yield
fell to -0.41% DE10YT=RR -- a three-month low.
Risk aversion was also evident in currency markets with the
Japanese yen JPY=EBS and the Swiss franc CHF=EBS gaining in
early London trading.
The Chinese yuan in the offshore market, considered as a
barometer of risk sentiment towards Chinese assets as mainland
and Hong Kong markets are shut, tumbled to a one-month low below
the psychological 7 yuan per dollar level CNH=D3 .
The number of confirmed deaths from the virus in China has
climbed to 170 with 7,711 people infected, and more cases are
being reported around the world.

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