On Tuesday morning, yields on U.S. Treasurys showed a slight decline, with the 10-year note yield at 4.6073%, down more than 1 basis point, while the 30-year bond yield remained steady at 5.1428%. The 2-year note yield also fell over 2 basis points to 4.0695%. This easing follows a sharp increase in yields on Monday, where the 10-year yield reached its highest level in 15 months.
A recent Bank of America survey indicated that 62% of global fund managers anticipate 30-year Treasury yields could rise to 6%, the highest since late 1999, suggesting a significant shift in market sentiment. In contrast, only 20% of respondents expect yields to remain around 4%.
Meanwhile, yields on European government bonds also showed minor fluctuations, with German 10-year bunds at 3.1471% and U.K. Gilts above 5%. Mohit Kumar, chief economist at Jefferies, highlighted that inflationary pressures, particularly from rising energy costs and political instability in the U.K., are influencing bond market dynamics.
He expressed skepticism about the justification for anticipated rate hikes, given that inflation may rise alongside declining growth. The current price of Brent crude oil is $110.38 per barrel, reflecting ongoing energy cost concerns that could further impact government borrowing and long-term yields