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Bond yields reflect borrowing costs for the governments who issue them, but can have an effect on mortgage rates, investment returns, the wider economy and personal borrowing.
Certain markets have their own domestic issues at play. An uptick in unemployment in the U.K., political instability in France, and the ongoing U.S. government shutdown are also influencing investors in those respective markets, for example.
However, market watchers told CNBC that Tuesday’s rally in sovereign bonds was largely due to a broad move into safer assets. Alongside bonds, gold, the Japanese yen and the Swiss franc — all typically regarded as safe haven assets in times of uncertainty or volatility — moved higher.
Investors are seeking options to ride out fresh tariffs-induced volatility, according to Marc Ostwald, chief economist and global strategist at London’s ADM Investor Services.
“The…
