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Treasuries: Best performing US asset in first three quarters of 2015

FXStreet (Mumbai) - Despite the looming threat of the Fed rate hike, the treasuries topped other US assets to become the best performer in the first three quarters of 2015.

Delay in rate hike and safe haven appeal

The treasury prices strengthened on account of the delay in the Fed rate hike. The lift-off was widely expected to happen in March, but the expectations later shifted to June and then to September. At the September meeting, the Fed stayed non-committal regarding the timing of the interest rate hike and thus a 25 basis point rate hike is now seen happening only in March 2016.

The slowdown in China and other EM economies, coupled with the Greek-led uncertainty kept the demand for the safe haven treasuries high.

As per the Bloomberg report, “The 1.9% return for US government securities this year beats the 3% decline in the Standard & Poor’s 500 stock index, the 0.1% dip in corporate bonds and a 2.1% slide in high-yield debt.”

Still, the 10-year treasury yield is widely expected to rise to 2.46% by the year-end. At the moment, the yield is trading at 2.047%; down 1.3 basis points on the day.

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