'Worse to come' as bond markets suffer flash crash

clock

Fund managers are urging caution following a dramatic week for investors, saying the traditional strategy of buying on market falls may no longer make sense.

Even the most liquid bond markets saw near-unprecedented moves last week as volatility returned with a vengeance, despite little in the way of concrete statistics other than poor US retail sales data. Wednesday’s ‘flash crash’ (in yields, not prices) saw the 10-year US treasury yield drop as much as 34bps to 1.84%, before rallying to 2.15% in the same session. It was a similar scenario in Thursday’s trading, as core bond yields plunged and peripheral European yields spiked before reversing course. John Pattullo, manager of the £1.2bn Henderson Strategic Bond fund, said last Wednesd...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Fixed Income

Partner Insight: Vanguard's Fixed Income Update - Yields decline on dovish Fed rhetoric in November

Partner Insight: Vanguard's Fixed Income Update - Yields decline on dovish Fed rhetoric in November

The key themes in global bond markets over the past month.

Kunal Mehta, Head of Fixed Income Specialist Team, Vanguard, Europe and Suparna Sampath, Fixed Income Product Specialist, Vanguard, Europe
clock 01 February 2024 • 8 min read
Bond market: Forget the crystal ball and focus on the easy win

Bond market: Forget the crystal ball and focus on the easy win

Fixed income offers more value now than at any time in the last decade

Darius McDermott
clock 28 November 2023 • 5 min read
Why it pays to be nimble in the fixed interest market

Why it pays to be nimble in the fixed interest market

Agility and active management needed when 'the chips are down'

Jerry Wharton
clock 21 September 2023 • 4 min read