A worldwide bond market surge pushed yields to the lowest in a year before a report that economists said will show the U.S. economy shrank in the first quarter, raising concern global growth is lagging behind expectations.
Government securities advanced across Asia, following a rally yesterday that drove the yield on the Bloomberg Global Developed Sovereign Bond Index (BGSV) to 1.28 percent, the least since May 2013. The gauge has climbed 4.3 percent this year, while Treasuries returned 3.6 percent, based on Bloomberg indexes. Each of the 26 bond markets from Hungary to Japan tracked by Bloomberg and the European Federation of Financial Analysts Societies have gained during the past month.
“People are beginning to realize that the recovery of the world economy is not strong enough to spur inflation,” said Yusuke Ito, a bond manager in Tokyo at Mizuho Asset Management Co., which oversees the equivalent of $39.3 billion. The American economy “is really weak. We are heavily overweight the U.S.,” he said.