Government bond yields soared in major markets on Tuesday as Japan and Britain’s borrowing costs hit multi-decade highs and U.S. bond yields soared amid renewed hostilities in the Middle East and renewed inflation concerns.
US is key 10 year Treasury bill The yield rose 3 basis points to a 20-month high, trading at 4.7880%.
Japanese benchmark 10 year bond yield It rose more than 6 basis points and rose to 3% for the first time since 1996. 2 year government bond The yield also hit a 31-year high of 1.81%.
Yields improve in other regions UK 10 year government bondThe stock index, known as Gilts, rose more than nine basis points to 5.2341%, its highest level since June 2008 at the height of the global financial crisis. of UK 30 year gilt Meanwhile, yields rose 9 basis points to 5.8856%, the highest level since March 1998.
US 10 year government bond.
German government bonds, usually seen as a barometer of the eurozone’s borrowing costs, also rose. of 10 year bond The yield rose more than 3 basis points to a 52-week high of 3.3546%. 2 year bond The yield reached 2.9496%, the highest level since July 2024. France 2 year government bond Yields rose to their highest level since April 2024.
Treasury Secretary Scott Bessent dismissed concerns about rising U.S. yields in an interview with CNBC on Monday.
Speaking on the sidelines of the G20 finance ministers’ meeting in Asheville, North Carolina, Bessent noted that Fitch Ratings reaffirmed government debt’s AA+ rating last month and said the U.S. bond market remains the “best performing market” in the world.
The rise in borrowing costs comes after the United States and Iran launched retaliatory strikes in recent days around the Strait of Hormuz, energy prices rose and inflationary pressures returned to investors’ attention.
brent crude oilthe global price benchmark was last seen up about 2.2% at $92.38 per barrel. West Texas Intermediate Futures It rose 2.61% to $88.05.
Japan 30 year bond.
Steve Englander, head of global G10 currency research and North American macro strategy at Standard Chartered, said the six-month dispute, combined with the Supreme Court’s tariff ruling that canceled about 40% of additional tariff revenue, had increased pressure on the bonds.
Yields across the curve remain under upward pressure, Englander said on CNBC’s “Squawk Box Europe” on Tuesday, adding that the U.S. is not alone in facing deficit problems.
“I don’t think what Mr. Bessent calls ‘best performance’ is the same as good performance,” Englander said. “Everyone has a budget deficit problem. I don’t see any reason to cheer.”
UK 10 Year Gilt.
The rise in the cost of UK government debt comes as British Prime Minister Andy Burnham is expected to later tell MPs that stronger public control is the only way to boost the country’s growth.
Burnham, who became Britain’s seventh prime minister in a decade in July, is said to be considering legislation that would make it easier to bring struggling utilities into public ownership, the Guardian newspaper reported on Tuesday. UK bond yields are also catching up with global bond yields after Monday’s bank holiday.
