(Bloomberg) -- Australia’s 10-year yield dropped to a record low as the global spread of the coronavirus accelerated the hunt for haven assets.
The benchmark yield slid as much as seven basis points to 0.84% amid rising infections in Europe and South Korea, while the U.S. identified its first case that had no ties to a known outbreak.
Treasuries have led a bond rally as investors increasingly expect global economic growth to slow and central banks to ease policies. Money markets are pricing in a 25 basis point interest-rate cut from the Reserve Bank of Australia in July, taking borrowing costs to a record low 0.50%.
Yields on Austrlaia’s three-year government debt fell 5 basis points to 0.56%.
“In addition to the terrible human toll, markets are now focused on the downside risks to the economic outlook posed by Covid-19,” Australia & New Zealand Banking Group Ltd. strategists including David Plank wrote in a Feb. 25 note. ANZ sees the 10-year yield falling to 0.75% in the first half of the year.