Bond Yields Reach New Highs Amid Market Volatility
US bond yields have hit new highs, reaching a 24-year high for 30-year bonds and potentially climbing to 6% as investors demand higher returns due to a hot American economy and concerns about federal government debt. The yield on US 30-year treasuries rose 5 basis points to 5.6%, while 10-year treasury yields increased by 6 basis points at 5.27%. This gap widens the difference with New Zealand's equivalent, which stands at 5.13%.
The heightened market volatility has prompted several companies to delay or postpone their planned listings. Oura, a US smart ring maker, has delayed its initial public offering (IPO) due to the market conditions, while Firmus Technologies, an AI data centre company, has pushed out its ASX listing after securing contracts with Meta that are expected to lift its earnings by about 15%.
The artificial intelligence sector is also experiencing increased scrutiny and demands for safety. OpenAI's latest funding round values the ChatGPT developer at US$1.4 trillion, while Anthropic's prospectus outlines its growth plans, including creating an entity for its founders to keep control of the Claude developer. The New York Times reported that OpenAI ignored staff warnings about monitoring models properly.