US bond yields decline due to a flight to safe havens

Treasury yields have embarked on a new downward trajectory due to increased demand for safe-haven assets. This inverse relationship between bond prices and yields is a common occurrence in the market.

The heightened demand for safe-haven assets, particularly U.S. government bonds, was spurred by escalating geopolitical tensions in the Middle East and the release of economic data indicating a strengthening U.S. labor market.

Rising tensions in the Middle East, fueled by reports of Israeli forces entering southern Lebanon, which were subsequently confirmed by the Israeli military, led to a surge in demand for safe-haven assets at the expense of global equities and other riskier assets.

JOLTS job openings report showed an increase to 8.04 million in August, surpassing the previous reading of 7.711 million and exceeding market expectations of 7.655 million. A robust labor market is generally considered a negative factor for central banks aiming to control inflation and achieve maximum employment.

Consequently, the yield on the 10-year U.S. Treasury note declined to 3.744%, compared to the previous close of 3.787%. Yields had earlier reached a session high of 3.794% before retreating to a low of 3.690%.”