Bonds Gain as Safety Trumps Inflation Fears Amid Russia Fallout
- Short-dated tenors lead the advance as rate-hike bets pared
- Central banks may strike a more ‘cautious tone,’ ING says
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Government bonds rose as investors piled into haven assets to ride out the market fallout from unprecedented sanctions imposed on Russia by the U.S. and its allies over the weekend.
Short-dated tenors led the advance, with the yield on two-year U.S. Treasuries dropping as much as 11 basis points, followed closely German and U.K paper. Concerns are growing that decision to freeze the Russian central bank’s assets and exclude some of the nation’s biggest lenders from critical international payment systems may increase stress in global funding markets.