US 10-Year Treasury Note Yields Fall to 3.99%
US yields fell across the board with the 10-year treasury note yield declining to 3.99% from 4.20% in the last two days in reaction to the “reciprocal tariffs” that President Trump announced against all countries and to the 34% tariff that China also set forth as a retaliation. From a technical perspective, while the TNX may rally in the very short run given its ability to bring itself back to 3.99% after it opened lower at 3.89%, its general bias remains on the downside following its recent breakdown from a notable bearish reversal in the form of a head and shoulders top. 10-year yields may actually slip all the way to its 2024 low of 3.61% as a result of the said pivot. Note that the last time yields were at that level, the PSEi was at its 3-year high of 7,500. The difference was that the decline in yields before was in anticipation of the pivot in Federal monetary policy. This may not necessarily be the case now as the potential decline in yields may be due to investors pricing in a possibility of a recession or a notable slowdown in the US economy given its tariff policies. We will soon see whether a decline in yields will entice investors to seek extra yields and growth in emerging markets like the Philippines or will lead them to be more defensive.
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