Bond yields tumbled as investors dumped stocks again on Monday after a reading of Chinese manufacturing activity plunged to a record low over the weekend and the US Federal Reserve signalled interest rates could be cut to mitigate the impact of the coronavirus.
Yields on benchmark 10-year US Treasuries dropped 11 basis points to 1.0347 per cent, a new record low, as market expectations of a rate cut at this month's Fed meeting rose after Fed chair Jay Powell said the central bank was “closely monitoring” developments.
Goldman Sachs also adjusted its forecast, predicting a 0.5 percentage point cut in March followed by another 0.5 percentage point cut in the second quarter in light of “exceptionally weak” China business activity readings released on Saturday.