Minutes to the Tokyo Stock Exchange open, the 10 Year US Treasury and 30 Year US Treasury yields fell to record lows. The 10 year yields touched 0.487% while the 30 year breached 1%, a historic low, amid coronavirus fears that are still weighing down on the market.
The outbreak in China and South Korea seems to be slowing down but countries in other parts of the world are adopting drastic measures to slow down the infection. North of Italy is on lock down after 133 deaths were reported on Sunday, bringing the total number of deaths over 350. In Iran, there were another 50 new fatalities, bringing the total deaths to over 200.
This has caused a downward pressure on the markets with the futures set to open down nearly 5%. In addition, In addition, the current oil price war between Russia and Saudi Arabia is adding stress to the market.
Last week, the Federal Reverse lowered the interest rates by half a percentage point in their policy meetings, a first since the 2008 financial crisis. According to the CME Fedwatch tool, the market has already priced in a 75 basis point reduction.
Some portfolio managers believe that US might try negative rates, especially with the downturn in price of oil.
