Bond markets plagued by drops

Bond markets are again being plagued by a drop in trading. While traders are returning from holidays and being less active than usual, prices are swinging. Yields on sovereign debt globally have plunged to the lowest ever, with rates on 30-year treasuries falling to their lowest point in more than two years.

The moves have been exaggerated by treasury trading below last year’s average, based on activity at ICAP plc. This means relatively few traders may be having a disproportionate effect on prices, even if there are some legitimate reasons for investors to plow into safer assets with oil prices tanking.

This “is mostly fundamental,” said Ira Jerseyof Credit Suisse Group. “But with poor liquidity, things are moving more than the headlines would justify.” n Bloomberg