LONDON: US Treasury yields fell sharply in early London trade on Monday, as worries over global growth appeared to trump expectations for higher interest rates for now.

World stocks were sharply lower with US stock futures down 0.5% as fears grew that Beijing was on the verge of joining Shanghai in lockdown to contain COVID-19, hurting growth in the world’s second largest economy.

Investors reacted by piling back into safe-haven bond markets in Europe and the United States - both of which have been battered this year by expectations for an aggressive monetary policy response to surging inflation.

US Treasury yields were down 7-10 basis points across the curve.

Two-year yields were down almost 9 bps on the day at 2.59% , having hit its highest level since late 2018 at around 2.79% on Friday.

Yields rise on hawkish central banks

Five-year yields, down 10 bps on the day, were set for their biggest one-day fall since March 1 and 10-year yields were trading at 2.81% – also pulling back sharply from recent multi-year highs.