- The S&P 500 futures drop, suggesting continued risk aversion.
- The US 10-year yield drops to nine-day lows.
- Coronavirus concerns weigh over risk sentiment and boost demand for safe havens.
Both the US stock futures and the government bond yields are flashing red on renewed coronavirus concerns and fading prospects of additional fiscal stimulus deal.
At press time, the S&P 500 futures are down over 0.5% and boosting demand for haven currencies like the Japanese yen, while the US 10-year yield is hovering at a nine-day low of 0.761%. The benchmark yield hit a high of 0.872% on Oct. 23.
The risk sentiment has weakened this week with the acceleration of the second wave of coronavirus infections across Europe and the US. Some of the Eurozone nations are reportedly considering imposing the economically-painful lockdown restrictions to contain the virus. Though less severe than the ones implemented in April/May this year, these measures could derail the already fragile global economic recovery.
As such, investors are moving out of risk assets and into traditional safe havens like treasuries, causing yields to drop.
Additional bearish pressures for the yields look to be stemming from the fiscal impasse in the US. President Donald Trump acknowledged Tuesday that a coronavirus economic relief deal would likely come after the Nov. 3 election.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.