Regional banking crisis keeping yields from going much higher, AmeriVet’s Faranello says
The recent regional banking crisis — which has led to the collapse of Silicon Valley Bank and Signature bank, along with the JPMorgan Chase takeover of First Republic — has led traders to seek shelter in Treasuries, Gregory Faranello of AmeriVet Securities said.
“In terms of what we’re seeing [in the bond market], it has more to do with the regional banking situation at this point,” said the firm’s Head of U.S. Rates Trading. “The market’s fearful that this situation is going to evolve and ultimately hit the real economy.”
“I think, if we didn’t have these event coming into the marketplace, in terms of the financial system, rates would probably be a lot higher than where they are now,” he said.
Treasury yields popped across the curve Friday after the release of the latest U.S. jobs report. The 2-year rate popped 20 basis points to 3.928%. The 10-year gained 10 basis points to 3.452%.
— Fred Imbert