Ukraine Tensions Trigger Sovereign Bond Trading As Investors Seek Safe Havens

Ukraine Tensions Trigger Sovereign Bond Trading As Investors Seek Safe Havens

Ukraine Tensions Trigger Sovereign Bond Trading As Investors Seek Safe Havens

Yields on the benchmark 10-year Treasury note rose and declined last week in concert with the news reports about Putin’s intentions with regard to invading Ukraine, falling to well below the 2% level on Friday—to 1.927%—ahead of the long holiday weekend in the US. This morning, yields have slumped even further—down at the time of writing to 1.872% as Treasury buying escalates.

Given this latest state of affairs, a torrid day for global markets, including sovereign bonds, would appear to be expected. Germany’s 10-year bond yield fell closer to 0.2% on Monday, down from above 0.3% last week, and has slipped further, to 0.185% currently. Still, the German benchmark may not be a fair proxy for Treasuries, given Germany’s vulnerability to energy blackmail from Russia.

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