Global bond sell-off resumes as 30-year Treasury yield hits highest since 2002

{"text":[[{"start":12.2,"text":"A global bond sell-off resumed on Wednesday, pushing long-term US borrowing costs back to their highest since 2002, as fears over inflation and high public debt burdens rattled investors."}],[{"start":25.25,"text":"The yield on 30-year US Treasuries climbed as much as 0.09 percentage points to 5.73 per cent, intensifying the squeeze on American households and businesses from the inflation shock set off by the Iran war."}],[{"start":39.7,"text":"European government bonds were also under pressure, with French and Italian yields rising about 0.15 percentage points, putting them on track for one of their steepest daily moves this year and extending a series of wild swings in what are typically staid markets. Bond yields move inversely to prices."}],[{"start":58.25,"text":"Investors said that a combination of debt concerns, high oil prices and the lack of visibility over an end to the Iran war was powering yields higher. Strong US economic data has added to the upward pressure on Treasury yields."}],[{"start":72.6,"text":"France’s 10-year borrowing costs hit 4.93 per cent, heading back towards the post-2002 high reached earlier this month, amid persistent worries that the Eurozone’s second-biggest economy is heading for a debt reckoning."}],[{"start":89.5,"text":"“France might be the first but it won’t be the last,” said Akshay Singal, global head of short-term interest rate trading at Citi. "}],[{"start":96.75,"text":"“We hear a lot about the bond vigilantes, especially in the UK, but I think it is really a question of having credible budgetary policies and that’s unfortunately a bit scarce right now globally, and that is what is driving the bond market.”"}],[{"start":null,"text":"

"}],[{"start":111.4,"text":"The renewed bond sell-off hit stock markets, with the Stoxx Europe 600 down 0.9 per cent in early afternoon trading."}],[{"start":120.55000000000001,"text":"The S&P 500 and Nasdaq 100 were down 0.4 per cent and 0.7 per cent, respectively, shortly after Wall Street’s opening bell and having closed at record highs on Tuesday. "}],[{"start":134.70000000000002,"text":"Evelyne Gomez-Liechti, multi-asset strategist at Mizuho, said that Wednesday’s selling was triggered by “risk sentiment souring” as oil prices moved higher again."}],[{"start":144.50000000000003,"text":"“Investors are very hesitant to buy [long-term bonds] because of all the volatility ”, she said, adding that “real money” investors such as pension funds were reluctant to step in despite the more attractive yields."}],[{"start":157.40000000000003,"text":"Brent crude, the international oil benchmark, was up 1.6 per cent at $102.23 a barrel."}],[{"start":164.75000000000003,"text":"In a sign of the threat to the US economy from rising yields, the average rate on 30-year fixed-rate mortgages rate hit 7.49 per cent on Wednesday, its highest level in almost three years, according to the US Mortgage Bankers Association."}],[{"start":181.25000000000003,"text":"The US on Wednesday is scheduled to sell $39bn worth of 10-year notes, which will offer insight into investor demand for bonds at these levels. An auction of $22bn worth of 30-year bonds is scheduled for Thursday."}],[{"start":194.95000000000002,"text":"The euro, which has been hit by concerns over France, was down 0.7 per cent against the dollar. It also touched its lowest level against the pound since mid-2025 in intraday trading."}],[{"start":207.4,"text":"“French risk is causing fresh idiosyncratic euro underperformance,” said Francesco Pesole, forex strategist at ING."}],[{"start":215.1,"text":"Some investors said that bonds were starting to look attractive after the sharp sell-off this year. "}],[{"start":220.79999999999998,"text":"John Stopford, head of multi-asset income at Ninety One, said that “if the sell-off carries on much further”, bonds would start to look “meaningfully cheap” and described 30-year Treasuries approaching 6 per cent as a “steal”."}],[{"start":235.39999999999998,"text":"The gilt market was also swept up in the volatile trading, with 10-year yields rising 0.12 percentage points to 5.5 per cent, moving close to the post-2007 high set last week."}],[{"start":249.54999999999998,"text":"“I don’t think there is a hard ceiling here [on yields],” said John Thornton, head of fixed income at Keyridge Asset Management. “The only thing that fixes this in the short term is a significant shift in the oil price.”"}],[{"start":272.2,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1791381664_6116.mp3"}