Treasury yields reach new decade highs in Asia as traders become concerned about the duration of elevated interest rates, causing a dampening effect on stocks, particularly in China, even as some markets attempt to rebound.
US bond-market selloff continues as resilient economy prompts investors to anticipate elevated interest rates even after the Federal Reserve finishes its hikes, leading to a 16-year high in 10-year yields and increased inflation expectations.
Bond selling has driven 10-year Treasury yields to 16-year highs, possibly due to the timing of the Bank of Japan's signal to allow higher yields and speculation on the upcoming Federal Reserve symposium, with implications for risk appetite and a focus on Fed Chair Jerome Powell's Jackson Hole speech.
Surging U.S. Treasury yields are causing concern among investors as they wonder how much it will impact the rally in stocks and speculative assets, with the S&P 500, technology sector, bitcoin, and high-growth names all experiencing losses; rising rates are making it more difficult for borrowers and increasing the appeal of risk-free Treasury yields.
The Chinese bond market is experiencing a significant shift due to concerns over China's economic growth prospects, including a bursting property bubble and lack of government stimulus, leading to potential capital flight and pressure on the yuan, which could result in increased selling of US Treasuries by Chinese banks and a rethink of global growth expectations.
The recent spike in U.S. bond yields is not driven by inflation expectations but by economic resilience and high bond supply, according to bond fund managers, with factors such as the Bank of Japan allowing yields to rise and an increase in the supply of U.S. government bonds playing a larger role.
The recent sell-off in US bonds has led to a rise in the yield-to-duration ratio, indicating that yields would need to increase significantly to generate losses, providing a potential floor for the struggling market.
The US bond market faced selling pressure as Federal Reserve Chair Jerome Powell affirmed the central bank's readiness to raise interest rates and maintain them at higher levels to address inflation concerns.
A new analysis suggests that the Federal Reserve should be prepared for unlimited bond purchases in order to prevent the U.S. Treasury market from seizing up during future crises, as it did at the beginning of the COVID-19 pandemic.
US Treasuries are attracting investors despite the possibility of interest rate hikes, as the potential income from high yields outweighs the potential losses from rate increases.
Investors should consider moving into longer-dated bonds as historical data shows that the broader U.S. bond market typically outperforms short-term Treasurys at the end of Federal Reserve rate hiking cycles, according to Saira Malik, chief investment officer at Nuveen.
Despite the appearance of a "Goldilocks" economy, with falling inflation and strong economic growth, rising yields on American government bonds are posing a threat to financial stability, particularly in the commercial property market, where owners may face financial distress due to a combination of rising interest rates and remote work practices. This situation could also impact other sectors and lenders exposed to commercial real estate.
U.S. Treasury yields rise as investors await jobs report for insight into the economy and Fed's monetary policy decisions.
The 10-year Treasury bond is a "screaming buy" for investors as the yield is likely to fall over the next year due to the Fed's success in curbing inflation, according to BMO Capital Markets head of US rates strategy Ian Lyngen.
Major companies are becoming more cautious about borrowing in a higher interest rate environment, leading to a decrease in corporate bond issuances.
Investors are growing increasingly concerned about the ballooning U.S. federal deficit and its potential impact on the bond market's ability to finance the shortfall at current interest rates, according to Yardeni Research.
Foreign holdings of U.S. Treasuries increased for a second consecutive month in July, reaching $7.655 trillion, despite uncertain interest rates and mixed economic data, with China's holdings dropping to the lowest level since 2009, potentially due to pressure to defend its weakening currency.
High-yield bonds outperforming relative to corporate bonds suggests a risk-on environment for stocks, according to a bullish signal in the bond market.
Bond yields have reached 17-year highs due to a "hawkish pause" at the Federal Reserve's September policy meeting, leading investors to accept a higher-for-longer interest rate stance.
U.S. households now hold more Treasury securities than at any point in the past 25 years, as the rise in U.S. yields makes them attractive to investors.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/PHDWNBGPI5PGTGU2AOTZ7MS34M.jpg)