The breakdown in the US-China trade talks has made the bond market fear about a recession. It seems that after a long time as it has last happened in 2016 at the presidential elections, the iShares Barclays 20+ Year Treasury has been lifted to its highest. The long-time players on the market have been discouraged by the rumors of a yield inversion after the CBOE 10-Year Treasury Yield Index has dropped significantly to a 21-month low. In addition, the 10-year Treasury has now become less valuable than the three-month Treasury bill.
The US economic data seems to have a prosperous growth making it difficult to determine whether a recession is approaching or not especially because it has been observed that free trading is one of the most influential factors in America’s growth. Considering the trade fight that took place last year between the superpowers of the country, when consumers and employers faced many challenges, tariffs seem to create an even more problematic scenario as they have now risen up to 25 percent. Moreover, challenges don’t seem to stop to appear as President Trump is focusing on creating a list with more legal obligations that include every Chinese import.
Changes that have arisen in the Ishares Barclays20+ Year Treasury
In July 2002, the iShares Barclays 20+Year Treasury Bond has jumped to the value of $80 and then gradually increased and decreased between the values of $80 and $100. Although it has succeeded to reach the value of $123, the challenges brought by the economic collapse that took place in 2008 made it fall back into its initial range. The year 2011 seemed to be a more successful one for the fund as a buying wave has arisen reaching the highest value than it has ever had during that decade.
The fund has become a very unpredictable one over the past eight years experiencing high values that reached $143.62 in July 2016 after experiencing downturns since 2015 when it has reached the level of $115.
The results after the trade talks have ended
The end of the trade talks has brought some changes that were easy to notice including the fact that the bonds have increased in value while stocks fell, easing between $127 and $132 during the time frame of November 2016 and 2017. Specialists are expecting for the fund to drop back below $125 eliminating the excessiveness of the price which seems to be good news for equity watchers.
The 10-Year Treasury Yield is close to reaching 2-Year Low
The Yield Index has shown lowering for almost 38 years leading to impressive ease between lower highs and lower lows. After hitting a new low of almost 1.50 percent in 2012, the uptick failed just above 3.00 percent in 2014. A climatic selling wave is expected to take place which will result in dumping yields to even lower lows.