Global bond prices rebound as UK 10-year government bond yield falls to 5.18%

Although energy prices continue to keep the market on alert, some investors find it hard to resist yields near their highest levels in decades, causing global bond prices to rebound. The yield on 10-year UK government bonds fell by 5 basis points to 5.18%, after previously reaching its highest level since August 2007. Other markets saw more modest moves, with the yield on 10-year German government bonds edging down by 2 basis points, and the 10-year US Treasury yield falling by 1 basis point to 4.77%. Traders are closely watching remarks from Trump on Wednesday. He suggested that the latest round of conflict between the US and Iran would be short-lived. Earlier this week, oil prices had surged, sparking inflation concerns and increasing bets on rate hikes, which drove global bond yields higher; oil prices have now retreated. Kevin Zhao, head of global sovereign fixed income and forex at UBS Asset Management, stated that after the yield on 30-year German government bonds climbed to 3.84% this week—the highest level this year—he has been buying at the long end of the German government bond yield curve. “This yield level is very attractive,” he said. “During political crises or periods of high tension, German government bonds can serve as an excellent safe-haven asset.”