All articles tagged with #us bonds
US Treasury yields ended the week steady after hitting 24-year highs, with the 10-year note at 5.244% and the 30-year at 5.60%. Investors weighed Federal Reserve comments on potential rate hikes against diplomatic shifts in the Middle East conflict, which influenced oil prices. Mortgage rates also saw a slight decline, reaching two-week lows.
Oil prices and US Treasuries rose as Trump demanded reparations from Iran for Americans killed or wounded and for damages in the region, while Iran pressed for sanctions relief and to keep the Strait of Hormuz closed until assets are released; markets priced in higher inflation and a possible Fed rate hike, with Brent about $89.8 and WTI around $84.2, and yields climbing across the curve (2-year > 4.25%, 10-year > 4.7%, 30-year > 5.27%). Despite US claims of Hormuz control, shipping data show traffic remains far below normal as talks stall and economic pressure mounts.
Stock markets showed cautious optimism ahead of the US employment report, with bonds rebounding and stocks reaching record highs, amid concerns over US hiring slowdown, fiscal policy, and interest rate outlooks.
Global investor skepticism towards long-term US government debt is turning a routine bond auction into a critical market test, with rising yields and weak demand reflecting concerns over US fiscal health and political influences, especially for 30-year bonds, amid broader global debt issues.
The US dollar declined to a three-year low amid weak manufacturing data and concerns over debt sustainability, while US bonds faced pressure and metals prices surged following increased tariffs on steel and aluminium imports.
The US sold 30-year bonds at a yield of 4.360%, slightly lower than the 4.380% when-issued yield, indicating strong demand for the long-dated debt despite concerns about rising interest rates.
The debt ceiling crisis is causing short-term costs for insuring U.S. bonds to skyrocket, and repeated flirtations with debt default are already having subtle negative long-term effects in global markets. The $30 trillion market for credit default swaps is indicating that the debt ceiling standoff is truly serious. The cost of insurance for U.S. bonds over the next 12 months is about 50 times the price for Germany and about three to seven times that of countries like Bulgaria, Croatia, Greece, Mexico, and the Philippines. The United States is the core of world finance, but its periodic flirtations with debt default are putting it at a long-term competitive disadvantage.