Bond Market Selloff Deepens as Yields Reach Multi-Year Highs
The global bond market has experienced a significant selloff, with US Treasury yields hitting multi-year highs. The 10-year yield reached 5.18%, its highest level since 2007, while the 30-year yield peaked at 5.47%. The increase in yields is attributed to stronger-than-expected economic data and elevated oil prices, which have fueled bets on another Federal Reserve rate hike.
The US-China meetings in Washington DC between Xi and Trump have yielded little progress, with no concrete agreements reached. In the US, initial jobless claims rose to 163,800 last week, while continuing claims reached a new 60-year low of 1.55 million. The Kansas City Fed factory survey remained positive, but price pressures intensified.
Canada's August retail sales increased by 1.3% (real), offsetting the previous month's decline. China raised its petrol prices to ¥8.90/L, while Australia reported a +39,500 increase in jobs in August, with an unemployment rate of 4.6%. The global container freight rates have stabilized after recent fluctuations.
The US Treasury seven-year bond auction saw a median yield of 5.02%, its highest in 20 years. Wall Street and European markets have reacted to the rising yields, with the S&P500 down -0.1% and the Nasdaq also declining by -0.1%. The price of gold has fallen to $4264/oz, while oil prices have risen.