Global Bond Yields Approach Eight-Month Low on Demand for Haven

  • Bloomberg Global Developed Sovereign Bond Index yields 0.957%
  • Treasury 10-year futures contracts advance for seventh day

Global bond yields approached an eight-month low as tumbling stocks drive demand for the relative safety of government debt.

The Bloomberg Global Developed Sovereign Bond Index yielded 0.957 percent at the end of last week, less than one basis point from the lowest level since April. The index has risen 1.1 percent this month, compared with a 6.3 percent loss for the MSCI All Country World Index of shares.

“It’s just more flight to quality until we see stock markets stabilize,” said Ali Jalai, a bond trader at Bank of Nova Scotia in Singapore.

Stocks around the world tumbled last week as China weakened its currency, fueling concern officials felt a slowdown in economic growth was more severe than anticipated, prompting them to take emergency steps. China’s central bank kept the currency’s daily fixing stable Monday for the second day.

Treasury futures contracts rose for a seventh day. Contracts March delivery advanced 1/8, or $1.25 per $1,000 face amount, to 127 17/32 in electronic trading as of 11:09 a.m. in Singapore. Trading in Treasury bills, notes and bonds was closed in Japan for a holiday.

The MSCI Asia Pacific Excluding Japan Index of shares dropped 1 percent. The South African rand slumped as much as 9 percent and oil futures fell 2 percent, helping drive demand for safety.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE