StoneX Media
The two-year U.S. Treasury yield has fallen about ten basis points since a hot Consumer Price Index print, and safe-haven demand is now driving a gilts and bunds rally behind it. U.K. gilts and German bunds are following U.S. Treasuries higher as earnings season pressure and AI jitters push money out of equities and into government debt. That same print showed headline inflation at 3.7% and core inflation at 2.6%, with gasoline leading the basket. The inflation picture underneath the bond rally has not changed, which leaves sovereign debt markets pricing risk aversion rather than better data.
Shriya Samarth, Executive Director and StoneX Head of Rates, EMEA, works with institutional clients across fixed income and interest rate derivatives as a London-based G3 rates specialist. She tracks U.S. and European sovereign debt, gilt market liquidity and central bank expectations, with a focus on how inflation and energy shocks feed through to bond pricing.
Safe-haven demand for U.S. Treasuries, U.K. gilts and German bunds stems from a rough start for equities, with earnings season pressure and AI jitters weighing on stocks. Samarth links the equity weakness directly to the bond move, noting that it "led to a safe haven bid in U.S. Treasuries followed by U.K. gilts and German bunds". The gilts and bunds rally reflects a global rotation into sovereign debt rather than a U.S.-only story. For bond traders, the sequence matters, with U.S. Treasuries leading and European government bonds following.
"Interestingly enough, even core [CPI], which usually strips out food and energy, is showing an energy problem because energy is still considered an input into airline fares for fuel, which have risen month on month as well," Samarth explains. The two-year U.S. Treasury yield has fallen about ten basis points since a hot Consumer Price Index print, even with gasoline leading the headline basket higher. In contrast with falling yields, the inflation picture has not changed, and fiscal concerns and growth risks continue to weigh on the global economy, which suggests the gilts and bunds rally rests on risk aversion rather than on improving inflation data.
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Shriya Samarth, StoneX Head of Rates, EMEA
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only. StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs. This content does not constitute an offer, invitation, or solicitation to engage in any investment activity. The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice. Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced. This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity. StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate. This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations. Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
Safe-haven demand is lifting U.K. gilts and German bunds alongside U.S. Treasuries as equities stumble on earnings season pressure and AI jitters. Yet the inflation picture beneath the rally has not changed, with energy now feeding into core prices through airline fares.
Long-dated Treasury yields are giving investors a lower-risk alternative to stretched AI stocks just as Nvidia stalls at record highs. Higher yields reflect growth and inflation, yet they also squeeze debt-dependent AI hyperscalers and pull capital away from crowded tech.
Rising Treasury yields are hitting the Dow Jones and cyclical sectors much harder than AI and tech stocks. With the Dow Jones nearing oversold levels and the Nasdaq still overbought, U.S. indices now show a split that points to a possible sector rotation.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
