Morgan Stanley, which advised investors to bet on bonds before the U.K.’s vote to leave the European Union sent global debt markets surging, is cooling toward government securities.

The bank revised its outlook after yields in the so-called Group of Four — the U.S., Japan, Germany and the U.K. — plunged to records last week. Treasury 30-year yields extended their tumble to unprecedented levels Monday. Morgan Stanley, one of the 23 primary dealers that underwrite the U.S. debt, is echoing investor Bill Gross in advising caution following the rally.

“After having been bullish, we turn neutral on bonds as G4 yields sit at all-time lows,” Morgan Stanley analysts including Matthew Hornbach, the head of global interest-rate strategy in New York, wrote in a report July 8.

Bonds are surging as the Brexit vote drives demand for the relative safety of fixed-income assets. Investors see only about a 31 percent chance the Federal Reserve will raise interest rates over the next 12 months, futures contracts indicate. Treasuries are drawing extra demand because their positive yields compare favorably to negative 10-year yields in both Japan and Germany.

The benchmark U.S. 10-year note yield was little changed at 1.37 percent as of 1:40 p.m. in Tokyo, according to Bloomberg Bond Trader data. The record low set last week was 1.318 percent. The price of the 1.625 percent security due in May 2026 was 102 11/32.

Thirty-year bond yields set a new low of 2.0882 percent Monday.

Beating Stocks

In June, Hornbach and his group advised investors to hold long-duration securities in developed debt ahead of the June 23 Brexit vote. The Bloomberg Global Developed Sovereign Bond Index has jumped 2.2 percent since then, more than double the returns from the S&P 500 Index. Duration is a measure of a bond’s sensitivity to changes in yield, and a longer position reflects a more bullish view.

“The sovereign bonds are not up my alley,” Gross, who built the world’s biggest bond fund at Pacific Investment Management Co. and is now at Denver-based Janus Capital Group Inc., said on Bloomberg Television last week. “It’s too risky.” Low yields mean bonds are especially vulnerable because a small increase can bring a large decline in price, he said.

The European Central Bank will probably add to its stimulus measures when it meets July 21, which may extend the rally but will also mark a bottom for global bond yields including those on Treasuries, said Enna Li, a debt investor in Taipei at Mirae Asset Global Investments Co. She said she’s considering shorting, or betting against, U.S. government securities later this month.

“Yields will still go down, but Treasuries are too expensive for me,” said Li, one of the managers for the $83 billion Mirae invests worldwide. “The ECB may cut rates. After that, it may be a good signal to short Treasurys.”