Asian stocks drop with treasury yields hitting 20-month lows

• Asian stocks track US equities lower. 
• Bonds have picked up a bid and the 10-year treasury yield is currently trading t 20-month lows.

Asian equity markets are flashing red this Wednesday morning amid frees multi-multi-month lows in treasury yields. 

The Shanghai Composite index is currently down 0.17% and the Shenzhen Component is shedding 0.46%. Hong Kong’s Hang Seng is also down 0.63% and is accompanied by a 1.3% slide in Japan’s Nikkei index. 

Further, Australia’s S&P/ASX 200 is reporting a 0.70% drop on the day. 

Overnight on Wall Street, the Dow Jones Industrial Average registered a 200-point drop on trade tensions. The US President Trump on Monday said that Washington is not ready for a trade deal with China. Trump also said tariffs on Chinese imports could go up “substantially.”

The government bonds across the globe have picked up a strong bid amid risk aversion in the equities. 

Notably, the US 10-year treasury yield is currently trading at 2.24%, the lowest level since September 2017. Meanwhile, the yield on the 10-year Australian government bond yield fell below the Reserve Bank of Australia’s cash rate of 1.5% to print  a new record low of 1.49% earlier today. 

Looking forward, the investors will likely remain cautious with the US-China trade tensions showing no signs of abating.