The loudest voices telling stock investors to worry about ten -
year yields moving higher from two percent said the opposite when rates were moving down to two percent.
But with no recession in sight, a deteriorating supply / demand picture and rising inflation risks, it's not difficult to see 10 -
year yields moving above 3 % this year, the only questions being how far above and how fast.
Still, this looks generous compared to Europe, where 10 - year German Bund yields reached a new all - time low of 0.28 % and seven -
year yields moved below zero for the first time.
US stocks fell further (S&P -40 to 2595), with a drop in crude (WTI to $ 67.20) aiding the move while the 10 -
year yield moved lower to 2.927 % (2 - week low).
S&P futures stabilized from the morning selloff (2623), and the 10 -
year yield moved up to 2.953 %.
Obviously, a big part of the mismatch occurs because the 10 -
year yield moved only 10 bps.
We have seen this in Japan which has experienced multiple recessions without the 10 -
year yield moving below the 1 - year yield.
Not exact matches
Bond
yields, which
move opposite price, fell on the day, with the Fed - sensitive 2 -
year yield dipping to 2.49 percent.
«The Fed has
moved up the short - end rate up to 2 percent, and the 2 -
year note
yield has
moved up to the 2.5 percent level... It doesn't seem there's any significant slowdown in the economy.»
The
yield on the benchmark 10 -
year Treasury notes, which
moves inversely to price, was lower at around 2.43 percent, while the
yield on the 30 -
year Treasury bond was also lower at 3.046 percent.
The
yield on the U.S. 10 -
year Treasury jumped to its highest level since 2014 on Friday morning, underlining a wider
move in bond markets caused by central banks
moving away from financial crisis policies.
With respect to interest rates, we continue to see a bifurcation for U.S. rates where shorter - dated
yields move higher in response to possibly two or three more Fed rate hikes, while the U.S. Treasury 10 -
year yield trades in a 2.25 percent to 2.75 percent range, with a temporary
move toward 2 percent possible if geopolitical risks become realities.
10 -
year yields on Austrian government bonds — and indicator of stress on the country — are
moving sharply higher this morning.
The
yield on the benchmark 10 -
year Treasury notes, which
moves inversely to price, was higher at around 2.314 percent, while the
yield on the 30 -
year Treasury bond was also higher at 2.877 percent.
Prior to some of the past recessions, the two -
year Treasury
yield rose above the 10 -
year yield, although at the moment, the former is still below the 10 -
year note, but has recently
moved closer to it.
The «Futures Now» team discusses big
moves in the bond market, including climbing
yields in the U.S. 10 -
Year note.
The
yield on the benchmark 10 -
year Treasury notes, which
moves inversely to price, was higher around 2.398 percent, while the
yield on the 30 -
year Treasury bond held near 3.002 percent.
According to its most recent report, Ivernia West is
moving swiftly to develop Magellan at a cost of US$ 26 million for the annual production of 55,000 tonnes of lead a
year at a cost which should
yield handsome profits — or so they say.
The big
move came in the Treasury market, where the 10 -
year yield rose to trade at 1.84 percent late Friday, from 1.70 percent the week earlier.
While many analysts were predicting bond
yields to rise this
year as global economies improve, the suddenness of the
move was a large factor in the recent stock market selloff.
«US 10 -
year yield above 200 - day
moving average, broke downtrendline from March.
We can see the effect in the 5 -
year yield, which has barely
moved over the last several
years (especially when compared to the 30 -
year yield).
The
move came after benchmark 10 -
year Treasury
yields last week reached 3 percent for the first time since January 2014 on concerns about rising inflation and government borrowing.
A
move up in the US 10 -
year bond
yield (2.965 % - 2.995 %) and mostly firmer global equities were a headwind for gold.
All in all, we believe eurozone bond
yields may
move a little higher, but any increase is likely to be capped by the ECB's ongoing level of purchases, at least until policymakers start to signal their next steps on monetary policy later in the
year.
For example, some investors may have taken on more risk in their portfolios in recent
years by
moving into lower - quality bonds or dividend stocks, in an attempt to generate additional
yield.
Second, we like
yield and with rates as low as they are, one way to get
yield is to
move further out in maturity to the ten -
year mark.
That will be tricky given that 10 -
year Treasuries currently
yield below 2.20 per cent and this would decline precipitously with a recession and any
move to cut Fed funds.
Should the
yield curve steepen, with 10 -
year bond
yields moving above 2 % while short - term rates are anchored near zero, it would imply that a longer term inflation fear is re-entering the market.
Note that in the 1987 case, the unusually strong 10 -
year return reflects a
move to the extreme bubble valuations in the late 1990's, which have in turn been followed by 13
years of market returns below Treasury bill
yields.
The benchmark 10 -
year U.S. Treasury Note has
moved from a
yield of 2.06 percent on November 9, 2016 to a
yield of a tad over 3 percent earlier this week.
According to Bloomberg data, EM debt is offering
yields of above 4 %, and despite a strong
year - to - date performance (more than 13 %), we see potential for significant income with lowered spread risk, given the diminished expectations of a near - term Fed
move.
The
yield on the benchmark 10 -
year Treasury note, which
moves inversely to its price, hit a record of 1.378 percent, while the
yield on the 30 -
year Treasury bond was down at 2.1529 percent.
But despite two rate hikes and impending balance sheet reduction, the 10 -
year yield has
moved 15 % lower since early March while the dollar has been weakening — both contrary to many forecasts at the start of 2017.
«For the first time in weeks, the 30 -
year mortgage rate
moved with Treasury
yields and jumped 11 basis points,» Freddie Chief Economist Sean Becketti said in a release.
The initial down 5 %
move was blamed on the 10 -
year bond
yield jumping to 2.85 %.
Rick Rieder: So I think people — the benchmark 10 -
year, the 3 % that people are looking at, there's a lot of focus on — I think it's a big deal, but I think it's a big deal that
yields are
moving higher.
Goldman's base - case scenario calls for a 10 -
year yield of 3.25 percent by the end of 2018, though a «stress test» out to 4.5 percent indicates such a
move would cause stocks to tumble, economist Daan Struyven wrote in a note Saturday.
With the 10 -
year treasury
yield moving from 1.85 % to 2.37 % during our fiscal
year,
yield sensitive, defensive sectors, such as consumer staples and utilities, did indeed underperform the broader market.
With the supply outlook following the tax changes and new budget, Treasury
yields should
move upward through the
year.»
And what could be lower dividend growth
moving forward (relative to that big 10 -
year DGR) is compensated by a relatively high
yield of 2.97 %.
The recent widening of this spread is, of course, much smaller than was seen in 1994 in the previous episode of globally rising bond
yields, when the
yield on 10 -
year bonds in Australia
moved from 1 percentage point to about 3 percentage points above the comparable US
yield.
Since the September low point last
year US 10 - Year bond yields have risen 90bps, this compares to 125bps from the low point in July 2016 through to March 2017, or if you count it as one big move they've gone up 158
year US 10 -
Year bond yields have risen 90bps, this compares to 125bps from the low point in July 2016 through to March 2017, or if you count it as one big move they've gone up 158
Year bond
yields have risen 90bps, this compares to 125bps from the low point in July 2016 through to March 2017, or if you count it as one big
move they've gone up 158bps.
US 10 -
Year Bond
Yields have
moved through a number of key levels and are on the cusp of a major breakout.
But loans that follow the
yield on the 10 -
year Treasury will
move loosely in the same direction as the fed rate, but not in lock step.
Bonds were also on the
move, with
yields pressing higher after falling on Monday, with the 2 -
year yield hitting 2.26 % and the 10 -
year yield rising to 2.89 %.
Their greater flexibility allows the implementation of many of our key outlooks this
year:
yields that
move in very different ways depending on the maturity, as front end rates lead higher rates from Fed policy changes, but back end rates look vulnerable from overpricing fears of deflation.
In April, the 10 -
year Treasury
yield moved above 3 %, the first time since January 2014.
That
move pushed bond
yields to their lowest point in 75
years.
While this demand for
yield trend may explain some of why this principal component
moved this
year and may even highlight some recent alpha opportunities, the broader point here is more profound.