US government bonds rallied, the dollar firmed and equities wavered as investors positioned themselves for a slowdown in the booming pace of economic growth.
The yield on the benchmark 10-year US Treasury note fell 0.07 percentage points at one point on Wednesday to a four-month low before retracing slightly to settle around 1.32 per cent. Germany’s equivalent Bund yield dropped 0.03 percentage points to minus 0.301 per cent, its lowest since early April.
Fears the Federal Reserve would respond to a speedy US recovery and surging inflation with a rapid round of rate rises sent the yield on the 10-year note up to almost 1.8 per cent in March.
But such jitters have been replaced by expectations that US gross domestic product growth, which is expected to have reached an annualised rate of at least 9 per cent in the second quarter, was about to peak, analysts said.
Data from the Institute for Supply Management on…
