U.S. sovereign bond prices were higher Tuesday, after being closed Monday for the July 4 holiday, resuming a strong “safe-haven” bid as global equities fell lower.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hit a record of 1.378 percent, while the yield on the 30-year Treasury bond was down at 2.1529 percent. Meanwhile, the yield on Switzerland’s 50-year government bond fell below zero for the first time on Tuesday, according to Reuters.
Uncertainty surrounding global growth and the U.K.’s referendum voteresumed among investors Tuesday after a strong rally in equities last week. The U.K.’s ruling Conservative party will hold the first stage of its selection process for a new leader on Tuesday evening and potential candidates have been busy putting their ideas forward for the post-Brexit environment.
Sterling has also fallen to a 2-1/2 year low against the euro and redemptions in one U.K. property fund have been halted after a string of outflows. The pound also fell to a fresh 31-year-low against the dollar early Tuesday.
“Markets are settling uncomfortably into a post-Brexit dystopia. Rumors abound of crashing business expectations and culls of bankers. But, unlike the continuing hurly-burly of the political world, here on the trading floor we’ve pretty much gone through all the 8 stages of Brexit: Shock, denial, anger, bargaining, depression, applying for an Irish passport, acceptance.. and finally hope that it might not matter anyway,” Bill Blain, a senior fixed income broker at Mint Partners, said in a morning note.
In the U.S., May factory orders fell 1 percent after two straight months of gains.
At 2:30 p.m. ET New York Fed President William Dudley will also speak on the local economy at a roundtable discussion in Binghampton, NY.