Market volatility has risen in recent weeks as the June 23 election day approaches, but there was quite a bit of turmoil on Tuesday. It was the most visible sign to date of the mounting fears gripping markets as various polls showed more supporters of a Brexit.
Investors rushed for safety and sent sterling and stocks to their lowest levels in months.
Opinion polls showed Leave leading by significant margins, was most marked in government bonds, where a series of records were smashed as cash flowed into the relative security of sovereign debt.
German 10-year Bunds traded with yields below zero for the first time on record while Japan’s benchmark bond fell to a new low of minus 0.185 per cent.
The UK’s 10-year gilt yield recorded a new low, and the 30-year bond dropped below 2 per cent for the first time.
The US 10-year Treasury note yield at 1.6 per cent was just above its lowest close since 2012.
In Switzerland almost the entire market for Swiss government debt had fallen below zero, with 30-year debt offering an annual yield just below zero.
All eyes will be on UK finance minister George Osborne’s speech later on Thursday at Mansion House. Osborne has helped lead the Remain campaign and is expected to reinforce his case that a Brexit vote would have “real world” consequences for the UK economy and for individual voters.
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