Treasuries Gain Most Since May With Stocks Slumping, Italy Concern
- Move comes as equities sell-off spreads around the world
- ‘Short-term correlations have come back’: Nomura’s Goncalves
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Investors are turning to U.S. Treasuries as equities tumble around the world and Europe’s political troubles simmer, driving the sharpest decline in America’s benchmark yield since May.
A surge in market activity shows U.S. government bonds functioning as a hedge against losses in stocks. Traded volumes in the 10-year Treasury future on Tuesday spiked to more than 150 percent of their 10-day average and the benchmark 10-year rate fell as much as 9 basis points to 3.11 percent. The S&P 500 Index sank, following steep declines in Asian and European shares.