Treasurys stage a massive reversal
Donald Trump gives a thumbs up to the crowd after speaking at a campaign rally in Raleigh, North Carolina November 7, 2016.REUTERS/Chris Keane
Treasurys have seen a massive reversal following the news that Donald Trump has been elected President of the United States.
Aggressive buying pushed yields down as much as 17 bps in the belly of the curve after Trump won the key battleground state of Florida, North Carolina, and Ohio.
However, once it was clear that Trump was indeed victorious, vicious selling took hold in longer maturities, running yields back up into positive territory.
Here's a look at the scoreboard as of 9:41 a.m. ET:
- 2-year -1.2 bps at 84.2bps
- 3-year +2.5 bps at 1.050%
- 5-year +5.2 bps at 1.379%
- 7-year +7.6 bps at 1.716%
- 10-year +10.1 bps at 1.955%
- 30-year +14.3 bps at 2.758%
As for how a Trump presidency impacts Treasurys over the longer-term, that's still up in the air. In a note to clients sent out on Tuesday, Barclays' Interest Rate Research team of Rajiv Setia, Anshul Pradhan, and Amrut Nashikkar wrote, "If his agenda entails major fiscal stimulus, accompanied by a softer stance on anti-trade policies, we would expect a large bear-steepening sell-off; 10y yields could rise to 2-2.25%." They continued, "Alternatively, if his agenda centers on trade wars with no mention of tax reform, fiscal stimulus, and other market-friendly policies, risk-off may become acute and recession probabilities could rise. 10y yields could rally to 1.4% or lower."
Investing.com
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