Bond Market Selloff Shows No Signs of Letting Up Amid Trump-Xi Talks
The bond market selloff shows no signs of abating as investors await the outcome of talks between US President Donald Trump and Chinese counterpart Xi Jinping. The 10-year US Treasury yield, a benchmark of the $29-trillion Treasury market, touched a new post-financial-crisis high of 5.145% in early European trading.
Oil prices have also risen above $105 a barrel, exacerbating concerns about inflation and the Iran war, which had triggered the sharpest selloff in US Treasuries since last year's Liberation Day turmoil.
Analysts at Deutsche Bank pointed to Iran foreign ministry comments that it had presented a list of conditions to the US for restarting truce talks. These included acceptance of a shipping route agreed by Oman and Iran, an end to the naval blockade, and release of Iran's frozen assets.
AXA's Chief Economist Gilles Moec said all the ingredients were now in place for a rise in long-term interest rates: 'inflation is high, central bankers are giving hawkish messages, there's competition from the funding needs of the tech sector and there are no reassuring signs on the US debt trajectory.'
The dollar was hovering at a two-month high against a basket of other top world currencies following the sharp rise in Treasury yields.