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The 30-year U.S. Treasury bond yield (TYX – 5.756) now stands at its lowest level in more than a month.
Historically speaking, the long-bond yield is near the 5.60 level, a mark below which the TYX traded for only parts of seven months - from August 1998 to February 1999. That period mostly followed the bailout of the Long-Term Capital Management hedge fund, whose massive losses threatened the stability of the financial markets.
At that time, the TYX was driven down by the buying of the 30-year Treasury bond (as bond yields move oppposite to price movements), presumably a "flight to quality" - a safe haven for money in a time of great uncertainty.
The current rally in the long bond may be driven by the same type of buying, as the Nasdaq Composite (COMP – 3201.8) is down nearly 18 percent from its September 20 close. During the same period, the TYX has fallen from 5.962.