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The coronavirus scare has executed what no world financial shock might do to the benchmark U.S. treasury yield. The 10-year Treasury bond yield dropped under 1% for the first time in history on Mar three and closed at 1.02% because of the heightened demand for safe-haven U.S. treasuries.
In any case, economists warned about potential output loss. The Group for Financial Cooperation and Growth cautioned that an escalation within the coronavirus outbreak might slash global economic growth in half and lead a number of international locations to recession this 12 months. Consequently, world central banks are planning to behave dovish to counter the influence of the virus.
The Fed has already enacted an emergency charge minimize of 50 bps on Mar three to comprise the virus-led market rout and stop any potential financial loss. Not solely the Fed, the central banks of Australia and Hong Kong have walked the identical path currently. Different banks like BoJ and PBOC have additionally expressed their intentions to straightforward insurance policies, ought to the necessity be (learn: Is This the Right Time to Buy Australia ETFs?).
The ECB and the…