Bonds surge following report Flynn is set to testify against Trump

Getty ImagesA trader signals an offer in the Standard & Poors 500 stock index futures pit at the CME Group February 20, 2009 in Chicago, Illinois.
  • US Treasurys are surging following an ABC News report suggesting that Michael Flynn will testify that President Donald Trump told him to contact Russians.
  • No other media outlet has been able to confirm the report.
  • Flynn, the former national security adviser, was charged Friday with one count of making false statements to federal investigators.
  • He pleaded guilty to the charge and is cooperating with the investigation.

Heavy buying across the Treasury complex has yields sharply lower – especially at the long end of the curve. Here’s a look at the scoreboard as of 11:55 a.m. ET:

  • 2-year -3.2 basis points at 1.750%
  • 3year -3.8 bps at 1.854%
  • 5-year -5.8 bps @ 2.079%
  • 7-year -7.6 bps @ 2.232%
  • 10-year -7.7 bps @ 2.333%
  • 30-year -9 bps @ 2.737%.

Friday’s buying has longer-dated yields nearing the lower bound of the range that has been in place since the beginning of October. The benchmark 10-year yield has spent much of the past two months locked between 2.30% and 2.40%.

However, yields are still sharply higher from their early-September levels as traders dumped their holdings in anticipation tax cuts would pass through Congress. The benchmark 10-year yield was threatening a break below 2% before the selloff.

Aggressive flattening along the yield curve has the 2-10-year spread tighter by 4.5 bps near 58 bps. It’s near its flattest level since 2007.

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