US tech stocks came under selling pressure, prompting investors to shift into US Treasuries for safety, and the Treasury rally accelerated during Asian trading hours on Friday.
The US Treasury yield curve fell by at least 2 basis points across the board, extending losses from the New York trading session.
Government bonds in Australia, Japan, and New Zealand also declined, with their respective benchmark 10-year yields dropping roughly 5 basis points each.
Disappointing earnings from tech giants such as Alphabet intensified doubts about the AI trade and fueled a rise in risk aversion; at the same time, the world's largest cryptocurrency exchange, Binance, was suspected of being hacked, further stoking safe-haven sentiment in the market.
The benchmark US Treasury yield has fallen nearly 40 basis points in October and is on track for its first monthly decline since February.
Kenneth Crompton, head of rate strategy at National Australia Bank in Sydney, said that after this week's tech earnings releases, a fresh wave of risk aversion emerged, pushing bonds higher this morning.
Over the past month, deteriorating investor sentiment toward AI-related stocks has been a major driver of the US Treasury rally.
Federal Reserve Chair Warsh stated that future interest rate decisions will depend on upcoming economic data, which also provided support for short-term US Treasuries.
An index tracking US Treasury returns has risen 2% in October and is poised for its largest monthly gain since February 2025.
Traders are closely watching the monetary policy outlook.
Despite elevated energy costs adding to price pressures, the Federal Reserve and the Reserve Bank of New Zealand both held rates steady this week.
The market also broadly expects the Bank of Japan to keep rates unchanged on Friday.
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