Two-year gilt yields plunge most in five years

Volatility prompts move to safe havens

Two-year gilt yields have tumbled by the most since 2010 as investors seek safe haven assets and respond to shock monetary policy moves by global central banks.

This is the biggest drop since the Bank of England was boosting its quantitative easing programme six years ago, according to Bloomberg. Yields on two- and ten-year bonds have fallen following the shock move by the Bank of Japan last week to employ negative interest rates, amid anticipation the European Central Bank could also extend its QE programme as early as March. Two-year gilt yields have now fallen by 31bps over the past month and are trading at 0.34%, while 10-year bonds dropped by 11bps to 1.56% over the period to their lowest since April. Riddell: Why have so many investo...