The federal reserve averted a year-end liquidity crunch

23 January 2020

Research

Treasury Yields Fell Slightly on Wednesday as Investors Flocked Back into Risk Assets After China Unveiled Measures to Rein in the Spread of a Deadly Virus. The Yield on the Benchmark 10-Year Treasury Note, was higher at around 1,7778%, while the yield on the 30-year treasury bond rose to 2,2351%. The outbreak of a new strain of coronavirus in China`s Wuhan Region Sent Treasury Yields to a Two-Week Low on Tuesday. (CNBC) The Federal Reserve Averted a Year-End Liquidity Crunch by Pumping $ 256 Billion Into Repurchase Markets. The consequences are now rippling across the globe. The Extra Liquidity has LED to a Sharp Drop in the cost to borrow dollars to swap into other currencies, the Economics of Cross-Border Investment Flows. Japanese Bonds Have Become Less Attractive to U.S.-Based Investors, While Yen Funded Investors Now Find European Bonds and U.S. Credit more alluring. (Bloomberg) Source: Danareksa Securities Debt Research Photo by Vlad Tchompalov on Unsplash