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USA 10-year bond yield hits highest since 2014

27 April, 2018, 11:25 | Author: Melinda Barton
  • World Stocks stumble as US yields near 3 percent

Markets around the globe are keeping a close eye on the US bond market after the most recent move in yields exacerbated a sell-off in stocks on Tuesday. Yesterday, the precious metal rebounded following three days of sell-offs.

MSCI's broadest index of Asia-Pacific shares outside Japan .miapj0000pus edged up 0.09 percent.

USA government debt yields continued their upward climb Wednesday, with the rate on the 10-year Treasury note edging above the 3 percent benchmark it hit Tuesday for the first time since 2014.

The Dow .dji rose 0.25 percent overnight, ending a five-day losing streak, and the S&P 500 .spx gained 0.18 percent on optimism over a spate of upbeat earnings that managed to offset jitters over rising USA bond yields.

Global bond markets dropped Monday, taking benchmark 10-year Treasury notes closer to 3% for the first time in more than four years raising three major concerns for the market.

Nonetheless, the broader equity market reaction to the latest jump in USA yields appeared to be more measured compared to February, when a similar spike in rates sent stocks tumbling. "Yields have been trending lower for multiple decades really, so some have argued in the marketplace that we are right up on the cusp of a regime shift", said TD Securities commodities strategist Daniel Ghali.

"Expectations towards US rate hikes being gradual are enabling equities to take the current yield rise in stride".

The last time 10-year Treasuries traded near similar levels was back in April 2011. The yield has climbed on expectations of a steady USA economic expansion, accelerating inflation and concerns about increasing debt supply.


The WSJ Dollar Index, which tracks the currency against a basket of 16 others, rose 0.5% to 85.28, its highest since January 11.

A drop in the 10-year U.S. Treasury yield below the 3 percent mark also helped equities.

Facebook reported a surprisingly strong rise in profit and an increase in users, with no sign that business was hurt by a scandal over the mishandling of users' personal data.

The euro fell to its lowest against the dollar since mid-January, at $1.2096, after the European Central Bank kept monetary policy unchanged.

The dollar was steady at 109.420 yen after going as high as 109.490, its strongest since February 8.

Market sources say rising crude oil prices are fueling speculation of higher inflation.

Brent crude added 0.6 per cent to $74.43 a barrel and USA crude futures were 0.5 per cent higher at $68.38 a barrel.

Gold prices are falling today.

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