Two-Year Treasury Yields Briefly Breach 0.1%, Marking Record Low

Yields on two-year Treasury yields briefly printed a record low under 0.1% on Thursday as cash trading got underway in London after a holiday in Asia.

The yield touched 0.0972%, just days after a record-setting drop to 0.1012%. This latest move comes amid an abundance of liquidity, and wariness of buying longer-dated bonds while the Treasury is in the midst of heavy auction slate.

“Perhaps limited liquidity with Japan out has created an air pocket and driven the two-year yield to a fresh low,” said Prashant Newnaha, senior rates strategist at TD Securities in Singapore. The move could have further to go, in his view, with yields grinding lower due to “a wall of cash looking for a home.”

Short-dated bond yields have been under pressure recently, with bill rates hovering close to zero, as investors park more of their abundant cash in positive-yielding assets.

Treasury 2-Year Yields Briefly Dip Below 0.1% to Record Low

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