Treasury yields pulled lower amid flight to safety

The sour mood in Chinese markets is reverberating

At the lows in the past 20 minutes, the Hang Seng index was dragged down by over 5% and looks set for a real ugly close as fears surrounding regulatory measures on the tech and property sectors in particular are weighing.

Adding to a crackdown on the education sector as well, Chinese equities are experiencing a real bloodbath to start the new week and that is starting to reverberate elsewhere.

US futures are down by 0.4% to 0.6% now and we’re seeing a flight to safety take place with Treasuries bid; 10-year yields falling 3 bps to 1.245%.

That is pinning USD/JPY at the lows near 110.00 with commodity currencies also pressured as the dollar also advances against the rest of the major currencies bloc.

All that being said, Treasury yields were pulled lower yesterday too before rebounding in US trading. As such, be wary that the jitters from China may not reverberate for longer parts of the day once local markets are closed – more so with focus on the Fed tomorrow.
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