(Bloomberg) — US Treasuries were set for their first day of gains this week on signals of strong demand for global bonds, ending a selloff that was driven by investor anxiety about government debt and elevated inflation. The broad pummeling of UK assets continued.

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Ten-year Treasuries yields fell 2 basis points to 4.67% on Thursday, halting a steady climb that had seen borrowing costs approach the psychologically key 5% mark over the past four sessions. Global bonds have been under pressure as the US economy continues to expand at a solid pace, with inflation threatening to keep rates high.

However, higher yields proved sufficiently tempting to draw investors back into the market, with a Japanese auction of 30-year bonds on Thursday receiving the highest average bid-to-cover ratio since 2020. A similar sale of 30-year US Treasuries on Wednesday also saw strong interest.

“We see these rebounds in yields as a great opportunity to lock in income, particularly for investors who are still sitting on too much cash,” Manpreet Gill, chief investment officer for Africa, Middle East and Europe at Standard Chartered, told Bloomberg TV. “We think yields can still fall further.”

The US bond market will shut at 2 p.m. New York time in observance of a national day of morning for former President Jimmy Carter. The stock market will be closed.

European bonds bucked the wider trend, however, as gilts stayed under pressure and the selloff in UK assets extended further. The moves are driven by concerns over Britain’s toxic mix of sticky inflation and sluggish growth, which is sending more traders to the exit.

The yield on 10-year gilts rose a further 3 basis points to 4.82%, after hitting the highest level since 2008 on Wednesday. The pound fell 0.7% to a level last seen in 2023. The FTSE 250 continued its slump for a third day.

“UK assets are going to struggle going forward,” said Sophie Huynh, a senior cross-asset strategist at BNP Paribas Asset Management. “Weaker growth momentum in the UK is really not priced in yet.”

Global stocks also remained under pressure. Nasdaq 100 futures slipped and Europe’s Stoxx 600 was little changed, following on from a weak session in Asia.

In currency markets, the dollar edged higher, while the yen strengthened toward 158 against the greenback. Japanese workers’ base salaries grew the most in 32 years, offering potential support for the central bank to raise rates this month.

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