Jan 27, 2025
In a sign of increased market anxiety, US Treasuries surged on Monday as investors sought refuge amidst a significant downturn in technology shares. For more details, see the full report here. The 10-year US bond yield dropped sharply by 10 basis points to reach 4.52%, the lowest level seen since January 2, while traditional haven currencies like the yen, Swiss franc, and US dollar strengthened.
The catalyst for this market volatility was the unveiling of a new AI model by the Chinese startup DeepSeek, which heightened fears around the sustainability of lofty US tech valuations, triggering a global stock market decline. According to Pooja Kumra, senior rates strategist at Toronto-Dominion Bank, there has been a noticeable reconnection between the movements of equity and rates in light of these prevailing risk-off sentiments in the equity markets.
This shift towards safe assets occurs…
