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US equity markets wiped out their gains for the year following news of the arrest of Meng Wanzhou, CFO of the Chinese tech and telecoms giant Huawei. Meng’s arrest has stoked fears that the trade-war truce between the US and China could be in jeopardy.

Thursday’s flight into Treasurys has yields lower across the curve, with heavy buying pushing yields up front down more than eight basis points apiece. The benchmark 10-year yield fell more than six basis points to below 2.85%, and was trading at its lowest level in more than two months. Here’s a look at the scoreboard as of 10:05 a.m. ET:

  • 2-year -8.6 bps at 2.709%
  • 3-year -9.2 bps at 2.713%
  • 5-year -8.9 bps at 2.696%
  • 7-year -7.7 bps at 2.763%
  • 10-year -6.7 bps at 2.847%
  • 30-year -4.7 bps at 3.125%

Thursday’s stampede into Treasurys has caused some steepening along the yield curve, with the spread between two- and 10-year yields ticking up two bps to 14 bps. On Tuesday, the 3-5-year spread inverted for the first time since the financial crisis, stoking recession fears.

“The yield curve has inverted prior to each U.S. recession over the past 50 years,” Jonathan Golub, chief US equity strategist at Credit Suisse, said in a note sent out to clients on Thursday.

“Unfortunately, the lead time between inversion and the onset of the subsequent economic contraction (14-34 months) has been quite inconsistent, making this a less useful signal.”

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