Heightened risk aversion is driving investors towards government bonds, considered a safe haven during times of economic turmoil. Concerns about declining corporate earnings and a potentially prolonged economic downturn are fueling this trend.

The surge in demand for government bonds has resulted in a decrease in bond yields. Lower yields reflect the increased willingness of investors to accept lower returns in exchange for the perceived safety of government-backed securities.

Analysts suggest this trend may continue in the short term, as uncertainty remains elevated. However, a potential economic recovery could shift investor sentiment and lead to a reversal of this flight to safety.