Bonds Lead Rethink on Reflation as Central Banks Signal Support
- Reflation pushback sends 30-year Treasury yield below 1.90%
- Europe cyclical stocks fall, haven currencies in demand
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Investors are backtracking on reflation bets, with the bond rally extending as central banks signal continued support and stocks falling as Covid-19 variants threatened reopening prospects.
U.S. 30-year yields fell below 1.90% for the first time since February, even as the Federal Reserve discussed tapering its bond purchase program at its meeting last month. German and Chinese 10-year yields hit multi-month lows as traders positioned for a prolonged easy stance by the European Central Bank -- which raised its goal for inflation in the culmination of an 18-month policy review -- and the People’s Bank of China.