US 10Y TREASURY: safe-haven for uncertain growth

The US 10Y Treasury yield fell sharply during the previous week, in line with a drop on US equity markets. At the same time, the price of gold headed toward a new all time highest level, marking its sixth consecutive gaining week. Uncertainty is a word which has dominated financial markets since the establishment of the new US Administration. Spooky words like tariffs, inflation, and questionable economic growth are currently dominating investors' sentiment, in which sense, some further funds reallocations are quite possible in the coming period. After new stories regarding tariffs, and Michigan Consumer Sentiment, which showed the highest inflation expectations for the period of next five years, investors were seeking safe-haven assets, like Treasury bonds and gold, in order to sustain the value of their money.

The 10Y Treasury yields dropped during the week from the level of 4,56% down to 4,43%, where they are closing the week. For the week ahead, there is a possibility for a short term reversal to the upside, however, Friday brings new US PCE data, which is Fed's favourite inflation gauge. Depending on the data, some higher volatility is possible again.