Bond Markets Bracing for September Storm as US Yields Surge
Global bond markets are bracing for another storm in September, with rising US Treasury yields putting pressure on investors. The benchmark 10-year borrowing rate has hit its highest since January last year, following a hawkish speech by Federal Reserve chief Kevin Warsh at the Jackson Hole symposium.
Warsh's comments sparked a sell-off in government bonds, with Japan's 10-year yield hitting 3% for the first time since 1996. The revival of the dollar is weighing on the yen again, amplifying calls for the Bank of Japan to raise interest rates this month.
The European Central Bank is also likely to increase borrowing costs soon, adding to bond market anxiety in Europe. The region's budget season and electoral calendar are contributing to investor unease.