Apr 11 2013 - Rate Brief

Treasury yields have pulled back aggressively from their mid-March highs as worries over Cyprus and an onslaught of disappointing data sparked a fresh round of safe-haven buying. The benchmark 10-yr yield fell 40 bps, bottoming at 1.68% before some recent selling pressure has made for a run to 1.80%. That region will be under careful scrutiny over the coming days as resistance in the area is helped by the 100-day moving average.

As Treasury yields have fallen, so too have high yield. The BofA Merrill Lynch US High Yield Master II Index's yield has eased significantly since the middle of February. Back then, the yield was just shy of the 6.00% threshold, but a stampede back into risk has it to a fresh record-low print of 5.56%.

Meanwhile, money has also begun to flow back into the safety of the BofA Merrill Lynch U.S. Corporates (7-10Y) AAA Index after bottoming out at the same time as Treasuries. The Index saw its yield tick to a high of almost 2.50% but steady buying over the past month has pushed its yield down 25 bps to 2.24%. The all-time low yield rests at 1.88%, and was hit most recently in December of last year.