Treasuries climbed across the curve Thursday, pushing long-end yields to the lowest in a month, as renewed doubts about the durability of the artificial intelligence trade drove investors toward havens.
US government bond yields fell at least three basis points as Asian equities retreated after earnings from megacap companies failed to ease jitters about stretched AI valuations. The 30-year yield dropped three basis points to 5.38%, its lowest since Sept. 23.
“Sentiment seems to be shakier these days as investors reconsider AI-related assets,” said Eugene Leow, senior rates strategist at DBS Bank Ltd. “A bit more caution on profitability, return on investments appear to be creeping in. With US yields still elevated by recent standards, investors may want to hedge off some of these risks by seeking safety in Treasuries.”
Concerns about the sustainability of the AI trade are offering some relief to US government bonds after yields hit multi-year highs in recent weeks on fears about widening fiscal deficits and elevated oil prices. A Bloomberg gauge of returns on Treasuries has climbed about 1.2% in October after rounding off its biggest monthly drop in almost two years in September.