This article was originally published on ETFTrends.com.
Treasury bonds and related ETFs are rallying as benchmark yields dip toward three-year lows in response to heightened global risks and increased demand for safety.
Analysts attributed the falling yields to a number of global factors, including new economic data that showed a decline in Chinese bank lending and a surprisingly sound defeat for Argentina’s pro-business president in a primary election, the Wall Street Journal reports.
Treasury yields have also been depressed lately on increased concerns of a global slowdown and signs that central banks around the world will loosen their monetary policies to stimulate growth.
“We’re a bit perplexed about the level of yields,” Andre Severino, head of global fixed income at Nikko Asset Management, told the WSJ. “It’s kind of like Armageddon is being priced in.”
What Low Yields Mean
Low yields present “not necessarily an awful picture, but not a great picture,” Andres Sanchez Balcazar, head of global and regional bonds at Pictet Asset Management, told the WSJ. Ultimately, they “create a lot of pressure on society” when savers faced with lackluster investment returns discover “their retirements are not going to be what they expected them to be.”
President Donald Trump said there will be no quick deal with China and called into question the next round of trade talks, CNBC reports. This comes after the U.S. president said a new 10% tariff on the remaining $300 billion worth of Chinese imports will take effect on September 1, and China responded by halting purchases of U.S. agricultural products and allowing its yuan currency to break above the 7 per dollar level for the first time in over a decade.
For more information on the ETF industry, visit our current affairs category.
POPULAR ARTICLES AND RESOURCES FROM ETFTRENDS.COM
- SPY ETF Quote
- VOO ETF Quote
- QQQ ETF Quote
- VTI ETF Quote
- JNUG ETF Quote
- Top 34 Gold ETFs
- Top 34 Oil ETFs
- Top 57 Financials ETFs
- ETF Flows Are Having A Great Year
- Trump Trade Comments Drive Market Lower
- FlexShares Debuts Quality Low Volatility ETF Suite on NYSE
- Can Libra Save Facebook?
- Brooks Runs With American Flag Shoe