Latest news with #TreasuryYields
Bloomberg
16 hours ago
- Business
- Bloomberg
Treasury Traders Await Labor Data to Trigger Rate Shifts
Bond investors are looking to a slew of labor-market indicators — including the May employment report — for help in determining the next shifts in Treasury yields and the Federal Reserve's interest-rate policy. US Treasuries capped their first monthly decline in 2025 in May, according to a Bloomberg index, with sentiment for longer-dated bonds rattled by worries around the nation's fiscal outlook. Traders now enter June betting on two quarter-point rate reductions this year, down from around three in early May.
Yahoo
2 days ago
- Business
- Yahoo
Soaring U.S. debt doesn't just put America at risk. It could trigger contagion across global markets, IIF warns
Treasury yields spiked recently amid mounting fears that investor demand for U.S. debt is waning just as supply is taking off, with a budget bill in Congress expected to add trillions to the deficit. But the effects of rising debt won't be limited to the American economy, according to the Institute of International Finance. It's not just Americans and the federal government poised to feel the effects of U.S. debt, which has exploded in recent years and could get even worse soon. Borrowing costs in certain countries often move in tandem, meaning volatility in Treasury bonds will create ripples in other debt, according to a recent report from the Institute of International Finance. 'The implications of rising U.S. debt levels are not limited to the domestic economy; they are also likely to trigger significant contagion and spillover effects across global bond markets,' IIF economists wrote on May 22. 'A potential increase in volatility in U.S. Treasury markets—driven by growing market attention to supply-demand dynamics and the composition of borrowing needed to finance anticipated large funding requirements—is likely to transmit to other jurisdictions, though the magnitude of the impact will vary.' U.S. debt has been top of mind lately as a Republican budget bill moving through Congress is expected to add trillions to the budget deficit in the coming years. That's jolted Treasury yields, and weak demand at a 20-year bond auction earlier this month exacerbated fears that investors won't have an appetite big enough for all the red ink coming soon. In fact, Deutsche Bank warned there's a buyer's strike among foreign investors, who are no longer willing to finance massive U.S. fiscal and trade deficits. IIF pointed out that there's a long-standing pattern of sovereign yields moving together, especially in the U.S., U.K., Germany and France, 'reflecting the deep interconnections among these economies through trade and capital markets.' Yield sensitivity is more limited in Japan and other some major emerging markets, according to IIF, but their interconnections were on display recently and showed that volatility can flow in both directions. A weak auction of 40-year Japanese government bonds on Wednesday sent JGB yields higher—and U.S. Treasury rates as well. Days earlier, George Saravelos, head of FX research at Deutsche Bank, predicted higher yields for Japanese assets would make them a more attractive alternative for local investors, encouraging further divestment from the U.S. To be sure, the vastness of the Treasury market and its deep liquidity mean that buyers and sellers will still be drawn to the U.S., but that immense size also crowds out others. IIF said in its report that there are signs of more sensitivity to rising U.S. debt levels among emerging markets, due in part to a shrinking pool of international capital available to sovereign EM borrowers. 'With the U.S. and Euro Area accounting for over 60% of global cross-border debt portfolios, emerging markets and developing countries represent less than 7%—with many individual countries accounting for only a fraction of a percent,' the report said. This story was originally featured on
Yahoo
3 days ago
- Business
- Yahoo
U.S. Treasury Yields Barely Move, Await PCE Data
Treasury yields were little changed ahead of PCE inflation data, and Pepperstone said that its overall bias was still toward some short-term Treasury gains before next Friday's nonfarm payroll print.
Bloomberg
3 days ago
- Business
- Bloomberg
High-Yielding Bonds in EM May Beat Peers as Treasuries Decline
Riskier emerging-market bonds may continue to beat their lower-yielding peers as the dollar's slide softens a rise in Treasury yields, protecting investor returns, according to analysis by Bloomberg. Debt from India, Indonesia, Brazil and South Africa has outperformed EM peers since April 2, when US President Donald Trump shocked global markets with his tariffs. The dollar rose in the four previous instances since 2021 when 10-year emerging-market bonds reacted to a rise in US benchmark yields. This time, however, the dollar has fallen, allowing currency returns to compensate for the duration spillover impact from higher US yields.
Yahoo
4 days ago
- Business
- Yahoo
U.S. Treasury Yields Rise After Court Blocks Trump's Tariffs
0627 GMT – U.S. Treasury yields edge higher after a U.S. federal trade court blocked some of President Trump's tariffs. 'Risk-on is back as the U.S. court of International Trade deems some of Trump's tariffs illegal and gives the administration 10 days to undo them,' says Commerzbank Research's Hauke Siemssen in a note. The 10-year Treasury yield is up 3.5 bps at 4.027%; the 10-year Treasury yield rises 4.5 bps to 4.523%, while the 30-year yield icreaeses 3.5 bps to 5.011%, according to LSEG data.
