{"id":2055097,"date":"2023-10-04T11:38:02","date_gmt":"2023-10-04T15:38:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/worlds-biggest-bond-markets-hit-by-relentless-selling\/"},"modified":"2023-10-04T11:42:20","modified_gmt":"2023-10-04T15:42:20","slug":"worlds-biggest-bond-markets-hit-by-relentless-selling","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/worlds-biggest-bond-markets-hit-by-relentless-selling\/","title":{"rendered":"Largest bond markets face unyielding sell-off."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">12<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fworlds-biggest-bond-markets-hit-by-relentless-selling%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2055097&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\"><br \/>\n<?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><html><body><\/p>\n<div class=\"entry-content\">\n<p>By\u00a0Alun\u2064 John\u00a0and\u00a0Naomi Rovnick<\/p>\n<p>October 4, 2023 \u2013 6:04 AM \u200cPDT<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<p><strong>LONDON Oct \u200b4 (Reuters) \u2013 An unrelenting selloff in world government bonds drove U.S. 30-year Treasury\u200b yields to 5% for the first time since 2007 and German\u2063 10-year yields to 3%\u200b on Wednesday in moves\u200d that could hasten a global slowdown, hurting stocks\u200b and corporate bonds.<\/strong><\/p>\n<p><strong>A growing sense \u2064that interest rates \u200cin major economies will stay higher \u200bfor longer to contain inflation,\u200d ever resilient U.S. economic data and a sharp unwinding of traders\u2019 positions for a bond rally have hit\u2063 home.<\/strong><\/p>\n<p><strong>In the\u200b U.S.\u200b Treasury market \u2014\u200c considered the bedrock of the global financial system \u2014 10-year yields \u2063have jumped 20 basis points (bps) to 4.8% this week \u2063alone. They are up almost 100 \u200cbps this year, \u2062having jumped over 200 bps \u2064in 2022.<\/strong><\/p>\n<p><strong>Bond yields move inversely to prices, and asset managers who had held bonds expecting prices to rally are now \u200cthrowing in the \u200ctowel.<\/strong><\/p>\n<p><strong>\u201cRight now there is huge\u2063 momentum behind\u2062 the sell off (in Treasuries) because the\u2062 positioning in the market\u200b has been wrong,\u201d said Juan Valenzuela, fixed income \u200bportfolio\u200d manager at asset manager Artemis.<\/strong><\/p>\n<p><strong>\u201cA lot\u2064 of people bought \u200binto the idea that because the Federal Reserve was reaching the peak of\u200c rate hikes, it was time to buy government bonds.\u201d<\/strong><\/p>\n<figure class=\"wp-block-image size-large\"><\/figure>\n<p><strong>Thirty-year U.S. yields on Wednesday touched the 5% psychological level for \u200bthe first time since the global financial \u2062crisis, and, as \u200bthe rout spread, Germany\u2019s 10-year Bund yield hit 3% , a fresh milestone in a market\u2063 where yields were negative in early 2022.<\/strong><\/p>\n<p><strong>Australian\u2064 and Canadian 10-year bond yields have surged \u200dover 20 bps each this week, and British 30-year government bond yields hit a fresh 25-year high above 5% on\u2064 Wednesday.<\/strong><\/p>\n<p><strong>In a further sign of investor nervousness, the\u200c closely-watched MOVE bond volatility \u2064index is \u200dat a four-month high.<\/strong><\/p>\n<figure class=\"wp-block-image size-full\"><\/figure>\n<p><strong>RIPPLES<\/strong><\/p>\n<p><strong>Government borrowing\u200c costs influence\u2063 everything from mortgage rates for homeowners to loan rates\u200b for companies.<\/strong><\/p>\n<p><strong>The speed of the bond rout\u2064 sparked alarm\u200c across \u2064equity markets and drove the safe-haven dollar to its \u200dhighest in months against the\u200c euro, pound and\u200d embattled Japanese yen.<\/strong><\/p>\n<p><strong>World\u200b stocks (.MIWD00000PUS) hit their lowest since April on Wednesday, and the cost of insuring exposure to a basket of \u200dEuropean corporate \u2062junk\u200b bonds hit a five-month high, according to data\u2064 from\u200b S&#038;P Global Market Intelligence.<\/strong><\/p>\n<p><strong>\u201cWe are \u2063very \u200bcautious on risky\u2062 assets at this\u2063 juncture,\u201d\u2063 said Vikram Aggarwal,\u2063 sovereign bond fund\u2062 manager at Jupiter.<\/strong><\/p>\n<p><strong>He said, on \u2064the one hand, \u200briskier assets like equities and corporate credit were vulnerable to an eventual recession caused by <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/shares-tiptoe-higher-amid-hiatus-in-bad-news\/\" title=\"Shares tiptoe higher amid hiatus in bad news\">central bank rate hikes<\/a>.<\/strong><\/p>\n<p><strong>Or, if \u200drecessions do not happen and \u201cwe get a higher for longer scenario where\u2064 (interest)\u200c rates stay where they are\u2026 that\u2019s ultimately pretty negative \u2064for risky \u2062assets too.\u201d<\/strong><\/p>\n<p><strong>A fresh surge\u200c in borrowing costs is also a headache for central banks, as they weigh up the need to\u2062 keep rates high to contain inflation\u200d against a deteriorating\u200d economic outlook.<\/strong><\/p>\n<p><strong>However, uncertainty about when\u200d and in what form that deterioration occurs is driving further complications in bond markets, and contributing to the sharper sell off in longer\u2063 dated bonds.<\/strong><\/p>\n<p><strong>The 10-year \u200bU.S. term premium, a closely-watched measure of the compensation investors demand\u200c to lend money\u200d for the longer term, has turned positive for \u200dthe\u200d first \u2064time since June \u20622021 and risen over 70 basis points since the end of August,\u200c according to the \u200dNew York Fed.<\/strong><\/p>\n<p><strong>\u201cEverybody\u2019s been calling \u200bfor\u2062 a recession that just simply refuses \u2062to arrive. And \u2064then you\u2019ve \u200bgot\u2064 the\u2063 march higher in oil prices, which of course is complicating the picture in terms of the \u200coutlook for policy\u200b rates,\u201d said Rabobank head of rates strategy Richard McGuire.<\/strong><\/p>\n<p><strong>\u201cAll\u2063 of that, I think is conspiring to see investors very wary of locking up their money in longer dated\u2064 government bonds. They\u2019re\u200c demanding compensation for that.<\/strong><\/p>\n<p>Reporting by\u2064 Dhara \u200cRanasinghe, Naomi Rovnick, \u200cAlun \u200bJohn, Yoruk Bahceli Chiara Elisei and Andy Bruce; Writing by Dhara Ranasinghe and Alun John; \u2063Editing \u2064by \u200cKim Coghill and Toby Chopra<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Representative Henry Cuellar speaks out after he \u2063was carjacked at gunpoint near his residence just\u200b a mile \u200caway\u200d from the Capitol.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Analysts predict\u2062 Generation Z \u2062will\u2063 have a massive impact on the 2024 Presidential Election. <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>The House of Representatives ousts Kevin McCarthy as \u200cHouse Speaker while Judge\u200c Engoron hits\u2064 Trump with a gag \u2064order \u2063 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>The \u200dBiden White House is \u200dputting a stop to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/worlds-biggest-bond-markets-hit-by-relentless-selling\/\" title=\"Largest bond markets face unyielding sell-off.\">senior\u200c administration \u2064officials \u200ctraveling internationally<\/a> for energy engagements that promote\u200c carbon-intensive \u200bfuels.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Meta is\u200c planning to lay\u200b off employees on \u200dWednesday in the unit of its metaverse-oriented \u2064Reality Labs division \u2063focused on creating custom silicon<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Sam Bankman-Fried\u2019s fraud trial got under way with \u2062jury selection on Tuesday, nearly a \u2063year after his now-bankrupt cryptocurrency exchange\u2019s\u00a0collapse.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>The <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/judge-rules-lady-gaga-not-obligated-to-pay-500k-reward-to-dognapping-accomplice\/\" title=\"Judge: Lady Gaga not required to pay 0k reward to dognapping accomplice.\">global cryptocurrency market \u2063remains badly scarred<\/a> following the tumultuous collapse of \u2063crypto \u2062exchange FTX and other big players last year<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>A California federal judge has ruled people who own Tesla cars must pursue autopilot claims\u200c in individual\u2064 arbitration rather than \u200ccourt.<\/p>\n<\/p><\/div>\n<p> \u2064rnrn  <\/p>\n<h2> How are asset\u2062 managers adjusting their strategies in response to the selloff in government bonds<\/h2>\n<p><span>  The Unrelenting Selloff \u2063in Government Bonds and Its Ripple Effects<\/p>\n<p>LONDON, Oct 4 (Reuters) \u200b- The\u200d world government bond market has experienced an unrelenting selloff, \u2064driving U.S. \u200d30-year Treasury \u2062yields to 5% for the first \u200ctime since 2007 and German 10-year yields to 3%. These significant moves could potentially hasten a global economic slowdown, impacting stocks and corporate bonds.<\/p>\n<p>Several factors have contributed to this selloff. First, there\u2064 is a growing sense that interest rates in major economies will remain higher \u200cfor a longer\u2062 period to contain \u200binflation. Additionally, the U.S. economy continues to show resilience, with robust economic \u2064data supporting the notion that interest rates \u200bwill remain elevated.\u2062 Lastly, traders have unwound their positions in anticipation of a bond\u2063 rally, further exacerbating the \u2062sell-off.<\/p>\n<p>The U.S. Treasury market, considered the bedrock of the \u2064global financial system, has seen its 10-year yields increase by 20 basis points\u2062 (bps) this week \u2063alone, reaching 4.8%. Year-to-date, \u200byields have risen by\u2064 almost 100 bps, \u200bwith a\u2064 staggering jump of over 200 \u2063bps in 2022.<\/p>\n<p>Bond yields\u200d move inversely to prices, and asset managers who had expected bond prices to rally are\u200b now making a shift in \u2063their strategies. Juan Valenzuela, a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/u-s-banks-prepare-for-cyber-attacks-after-latest-russia-sanctions\/\" title=\"U.S. Banks Prepare for Cyber Attacks After Latest Russia Sanctions\">fixed income portfolio manager<\/a> at asset manager Artemis, explains that there is significant momentum behind the sell-off\u2064 in Treasuries due to incorrect \u200dmarket positioning. Many investors believed\u2064 that the Federal \u200dReserve&#8217;s rate hikes would be at its peak, prompting them to buy government \u200bbonds.\u200d <\/p>\n<p>The 5% psychological level has been breached for the first time since the global financial crisis in U.S. 30-year yields, while Germany&#8217;s 10-year\u200c Bund yield touched 3%, a fresh milestone in a market where yields were negative in early \u200b2022.\u2064 Furthermore, Australian and Canadian 10-year\u2063 bond yields have surged by over 20 bps this week, and \u2062British 30-year\u2064 government bond\u200d yields hit a fresh 25-year high \u2063above 5% on Wednesday.<\/p>\n<p>The volatility in the bond market has\u2063 sparked alarm across equity markets, leading to a decline in global stocks and causing \u2063the safe-haven dollar to strengthen\u200d against major currencies such as the euro, the\u2064 pound, and the yen. The \u2063cost of insuring exposure to a basket\u2064 of European corporate junk bonds\u200b has reached a five-month \u2064high. These developments<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On October 4, 2023, a continuous sell-off in global government bonds pushed US 30-year Treasury yields to 5%, the highest since 2007, and German 10-year yields to 3%. These developments may accelerate a worldwide economic slowdown, negatively impacting stock markets.<\/p>\n","protected":false},"author":1911,"featured_media":2055098,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[],"class_list":["post-2055097","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2055097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1911"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2055097"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2055097\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2055098"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2055097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2055097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2055097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}