US Treasuries record sharpest rally since January 2016

US Treasuries this week recorded their sharpest rally since last January, while expectations for equities turbulence mounted in the latest sign of growing jitters across Wall Street trading desks.

The benchmark 10-year note yield skidded 13.9 basis points (0.139 percentage points) this week to 2.234 per cent, according to Tradeweb data. Yields, which move in the opposite direction of prices, have now fallen for five weeks in a row, declining 34.8bps over the period.

At the same time, a closely watched measure of expectations for S&P 500 volatility over the next month posted the biggest advance since the week prior to the US presidential election. The Vix index, sometimes called Wall Street’s “fear gauge”, climbed 3 points to 15.86.

In the final day of a holiday-shortened trading week for US stocks and fixed-income markets, equities indices continued the lacklustre pace they have set all week, with all three major US equities indices closing in the red as the selling picked up towards the day’s end.

The energy sector was the biggest drag on both the S&P 500 and Dow Jones, with the former closing down 0.68 per cent at 2,329, and the latter down 0.67 per cent at 20,454. The Nasdaq also ended the week in negative territory, shedding 0.53 per cent to close at 5,805.