“During an extreme fast-moving market during European trading hours, in a move to a safe-haven asset class, Treasurys often get a big echo trade,” Vogel told the WSJ.
The low yields in overseas markets have also helped support U.S. Treasuries as an attractive alternative source of yield for foreign investors. According to Fitch Ratings, a record $11.7 trillion of global sovereign debt has now entered sub-zero territory, reports Adam Samson for the Financial Times.
Looking ahead, some of the world’s biggest investors, including BlackRock, Guggenheim Partners and Vanguard Group, argued that the Brexit results could mean subdued growth and lower yields for years to come, reports Brian Chappatta for Bloomberg.
“The reason is simple: if you’re facing negative interest rates on over 30 percent of government debt, you’re going to go look for where you can get positive rates,” Mohamed El-Erian, the chief economic adviser at Allianz SE, told Bloomberg. U.S. 10-year yields “can go to 1.25 percent quite easily if we continue to see this combination of more central bank activism and a slowdown in Europe.”
For more information on the fixed-income market, visit our bond ETFs category.
iShares 20+ Year Treasury Bond ETF