Treasuries extended gains across the curve Thursday as a global equities selloff spurred demand for safe-haven bonds. Yields on benchmark 10-year US government debt fell five basis points to 5.14% in early Asia trading. Two-year and 30-year yields also declined. "The market has finally moved back to the old flight to quality — buy sovereign debt on equity selloffs," said Kit Lowe of ITC Markets. Treasuries extended Wednesday's gains after bonds recovered losses from a hotter-than-expected US inflation print. Several money managers, including Pacific Investment Management Co., have advocated for increased bond exposure. Global bonds rallied in Asia, with three-year Australian notes dropping 12 basis points after weak employment data. MSCI Inc.'s Asia Pacific shares gauge dropped 1.5%, led by losses in Seoul. The Bloomberg Dollar Spot Index fell 0.2% after reaching a high since May 2025. "We seem to be seeing the inverse correlation with equities reasserting itself — that is some safe haven flows into bonds with risk-off in other markets," said Andrew Ticehurst of Nomura Holdings Inc.
The bond buying occurs against a backdrop of selling pressure across equity markets, particularly in the US and South Korea. Kit Lowe emphasized the shift toward sovereign debt as a defensive asset during risk-off periods. The rally highlights persistent investor caution amid mixed economic signals and ongoing inflation concerns.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing