Brian Chappatta, Columnist

Traders May Hate Treasuries at 1.6%, But What Else Is There?

Strategists are lukewarm on the coronavirus-inspired bond rally.

January 27, 2020 at 6:03 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

A bond rally, but for how long?
Photographer: Spencer Platt/Getty Images

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

So far, 2020 has proved to be a tricky year for Wall Street bond strategists. First, they had to handicap the likelihood that a conflict between the U.S. and Iran would escalate into something truly terrible. Now they are grappling with the impact of the coronavirus that has left 80 dead in China, infected almost 3,000 people and spread across continents.

In both cases, the immediate reaction was a massive rally in the $16.7 trillion U.S. Treasury market. The benchmark 10-year yield plunged 9 basis points on Jan. 3 in the immediate aftermath of the U.S. drone strike in Iraq that killed Qassem Soleimani. Similarly, the yield fell 5 basis points on Jan. 24 and tumbled an additional 7 basis points on Monday as the fallout from the disease intensified.