The spread between two- and 10-year Treasury yields
fell to as low as negative 4.2 basis points Tuesday.
were dragged down overnight by the richening in European bonds, and especially the BTP and Gilt on news that Italian political parties were close to an agreement and amid rising Brexit jitters.
The scenario where 10-year Treasury yields
dip below the yields on two-year notes has been a reliable recession indicator, but another yield scenario may be worth monitoring.
The short-term US treasury yields
have been rising to multi-year highs, with the two-year yield hitting a high of 2.907 per cent, its highest level since June 25, 2008.
In the context of rising Treasury yields
and a stronger US dollar, most emerging market currencies have lost ground in Q2 2018, especially those of countries like Turkey, with external vulnerability.
Gold edged higher on Friday after the dollar and US Treasury yields
backed off highs, but the prospect of a Korean denuclearisation deal eroded bullion's safe-haven appeal.
The ringgit closed lower against the US dollar today due to dampened sentiment from surging US Treasury yields
, dealers said.
Looking at the debt market, US treasury yields
retreated last week as the 10-year treasury yield
reached a low of 2.807 percent after President Donald Trump sparked fears of a trade war announcing tariffs on steel and aluminum.
helped to strengthen the dollar, rising as the bond market braced for this week's $258 billion deluge of new government debt.
"The dimunition of QE check writing and a 5% nominal GDP should be enough to produce higher 10-year Treasury yields
, near 0% total returns, and the legitimate characterization of the beinning of a mild bear market," writes Gross.
failed to rise despite increasing investor risk appetite in broader financial markets, according to Reuters.