Global Bond Yields Surge to Crisis-Era Levels
Key Questions
What are current US Treasury yield levels?
The US 10-year yield stands at 4.56% and the 30-year at 5.07%, with the recent 30-year auction clearing at 5.058%, the highest since 2007. These levels match crisis-era highs across developed markets.
Why are global bond yields surging?
A $1.4T US deficit, $723B in interest costs, and record $504B H1 sovereign issuance are adding structural supply. Geopolitical tensions and term premium are also pushing yields higher.
How have French bond yields performed recently?
France's 30-year yield hit a post-2008 high amid a debt-to-GDP ratio of 118%. This reflects broader pressure on eurozone yields from fiscal concerns.
What is the positioning of banks in corporate bonds?
Banks have turned net short US corporate bonds for the first time in 25 years, with a $13.7bn short position in long-dated maturities. This marks a major structural shift in the market.
Are there any offsetting demand factors for bonds?
Record inflows into bond ETFs and a $165B equity-to-bond rotation are providing demand support. China 10-year yields have also fallen to 1.73% as a haven asset.
Yields across developed markets at financial crisis highs. US 10yr at 4.56%, 30yr at 5.07% (30yr auction at 5.058%, highest since 2007). UK 2yr gilt spiked 11bp to 4.349% on Middle East tensions, pulling BoE rate hike expectations forward. Japan 10yr at 2.87% (highest since 1996), 30yr above 4% on $2.3T spending plan. France 30yr hit post-2008 high. US deficit $1.4T with $723B interest costs adds structural supply. Bearish thesis targets 10yr at 6% by year-end. Record bond ETF inflows and $165B equity-to-bond rotation provide demand; record $504B H1 sovereign issuance adds supply. China 10yr yield dropped to 1.73% as haven. Eurozone yields edged higher on Middle East conflict. Banks net short US corporate bonds for first time in 25 years ($13.7bn short in long-dated maturities). LatAm bond spreads remain tight with issuance slowing. Yen at 52-week low sets up carry recompression risk. Fed and ECB minutes key events.