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Careful now.

With the Trump trade showing signs of faltering, knocking stock markets from their recent highs, safety conscious investors are buying government bonds, taking yields on sovereign debt notably lower.

(Yields rise when prices fall.)

The haven appeal of government bonds is back in vogue, with stocks looking overvalued as markets reassess the Trump administration’s prospects of getting its pro-growth policies through Congress at the same time as tackling healthcare reform.

Demand for the relative safety of 10-year US government debt has pushed yield on the paper to 2.4 per cent this morning, it low point for the calendar month. For comparison, at the start of March with the Trump trade in its full pomp, the same debt was yielding 2.6 per cent.

Germany’s 10-year Bund yield is down 4.6 basis points at 0.41 per cent, and the UK gilt over the same maturity is yielding 1.206 per cent, down 4.5 basis points.

Bonds are also in demand on the periphery of the eurozone, where Portugal’s 10-year yield is down 8.1 basis points to 4.095 per cent. Spanish 10-year debt is yielding 1.715 per cent, down 7.3 basis points.

Lee Hardman at Bank of Tokyo-Mitsubishi said Trump trades “are undergoing a correction in the near-term,” adding that delays to the president’s changes to healthcare laws could have a knock on effect for the rest of his policy programme :

The pushing back of tax reform could significantly dampen investor confidence in reflation trades in the near-term.

Heightened concern over the Trump administration’s ability to pass his proposed healthcare overhaul is contributing to the loss of investor confidence

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