The economic data released in global markets increased concerns about recession, causing a rapid decline in government bond interest rates in developed economies.
Global markets started the week with a historic decline after recession concerns in the US gained momentum.
According to data released in the US last week, non-farm employment increased by 114 thousand, well below expectations, while the non-farm employment data of 206 thousand in June was revised to 179 thousand.
While it is almost certain that the US Federal Reserve (Fed) will cut interest rates by 50 basis points next month, analysts say there is a possibility that the bank will hold an emergency meeting to calm concerns in the markets.
Rising recession concerns were first reflected in Asian markets. The decline in Japanese markets exceeded 12 percent and in South Korea, 8.5 percent. As concerns continued, European markets also opened with a sharp decline. The Stoxx Europe 600, defined as the benchmark index in Europe, fell more than 2.5 percent at the opening.
US BOND RATES AT 13-MONTH LOW
Government bonds, which are preferred by those who invest in state-guaranteed, low-risk and fixed-income assets, were also affected by recession concerns.
While the data released primarily in the US increased recession expectations around the world, this situation increased the interest in government bonds of developed countries.
Bond yields fell rapidly in many countries such as the USA, China, Japan, Germany, England and France.
The US 10-year Treasury bond yield, which fell 9 basis points to 3.68 percent and saw its lowest level since June 26, 2023, stabilized at 3.77 percent. The US 2-year Treasury bond yield fell to 3.79.
In the UK, 10-year bond yields remained stable at 4 percent, while 2-year bond yields decreased by 30 basis points to 4.26.
BOND INTERESTS DECREASED IN EUROPE AND ASIA TOO
Germany's 10-year bond yield fell 4 basis points to 2.12, the lowest level since January. Germany's 2-year bond yield fell 12 basis points to 2.24.
In France, 10-year bond yields are flat at 2.95.
In Spain, 10-year bond yields decreased by 7 basis points to 3.08 percent, while 2-year bond yields are flat at 2.94 percent.
In Italy, 10-year government bond yields remained flat at 3.61, while 2-year bond yields decreased by 4 basis points to 2.95.
Japan's 10-year government bond yield fell 18 basis points to 0.784, the lowest level since April. The country's 3-year bonds fell 15 basis points.
While China's 10-year bonds remained flat at 2.11, the decline in 1-year bonds reached 4 percent basis points.
On the other hand, when bond yields fall, economies become stagnant and stock markets are also negatively affected by this situation.