The yield on two-year Treasuries swung wildly, after traders reacted to news that Credit Suisse Group AG identified material weaknesses in its internal controls over financial reporting.
(Bloomberg) — The yield on two-year Treasuries swung wildly, after traders reacted to news that Credit Suisse Group AG identified material weaknesses in its internal controls over financial reporting.
Two-year US yields slid as much as 15 basis points to 3.82% erasing an earlier advance of 22 basis points. They were little changed around 2.25 p.m. Hong Kong time. Bund futures rallied with the yen, before paring gains.
For two years “the group’s internal control over financial reporting was not effective,” Credit Suisse said in its annual report released Tuesday.
Credit Suisse Finds ‘Material Weakness’ in Financial Reporting
The move highlighted traders’ sensitivity to newsflow in the financial sector, after the failure of several US banks muddied the outlook for Federal Reserve’s policy plan. Two-year yields saw their biggest drop since the Volcker era in the early 1980s on Monday.
“One has to be careful to make another assumption that shockwaves emanating from several bank failures can be ringfenced effectively,” said Winson Phoon, head of fixed income research at Maybank Securities Pte Ltd in Singapore. “Previously it was fundamentals that drove market sentiment but now, an avalanche of sentiment can change the fundamentals.”
Treasury Two-Year Yield Rebounds After Biggest Slide in Decades
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