Demand for safe-haven assets increased sharply on Friday, with government bonds leading the way as investors sought shelter from turbulent equity markets. Concerns about slowing global growth, particularly in emerging markets, and heightened geopolitical risks prompted the move towards safer investments.

Bond Yields Plunge

The yield on the benchmark 10-year Treasury note fell to its lowest level in nearly a month, reflecting the increased demand and corresponding price increase. Similar trends were observed in other safe-haven government bonds, including German Bunds and Japanese Government Bonds (JGBs).

Factors Driving the Rally

• Global Economic Uncertainty: Weak economic data from China and other emerging markets raised concerns about the pace of global growth.
• Geopolitical Risks: Ongoing tensions in various regions of the world added to investor anxiety.
• Equity Market Volatility: Sharp declines in stock markets worldwide prompted investors to reduce their exposure to riskier assets.

Analysts noted that the bond market rally was a clear indication of heightened risk aversion among investors. The trend is expected to continue in the short term, as long as uncertainty persists in the global economy and financial markets.