High Sell-Offs in U.S Treasuries Scare Market
The 10-year US Treasury yield increased as stalled global trade developments weighed on investor sentiment
Quick overview
- The 10-year US Treasury yield rose to 4.4263 percent amid stalled global trade developments.
- Investor confidence remains low as tensions escalate between the US and China over trade agreements.
- President Trump's pressure on the Federal Reserve to lower rates has undermined trust in US assets.
- Japanese investors have reportedly sold foreign bonds, likely including US Treasuries, contributing to the yield spike.
The 10-year US Treasury yield increased as stalled global trade developments weighed on investor sentiment.
The benchmark yield on the 10-year Treasury was 4.4263 percent, two basis points higher. The 2-year Treasury yield rose by more than five basis points to 3.8064 percent.
Investor confidence remained low despite the stalling of international trade negotiations. Beijing warned other nations against entering into agreements with the US that might be detrimental to China’s interests, seemingly escalating tensions between the two largest economies in the world.
President Donald Trump’s pressure on US Federal Reserve Chairman Jerome Powell to lower rates undermined the trust in US assets.
A steep selloff in the US Treasury market raised questions about who is selling them. According to preliminary information provided by Japan’s finance ministry and analyzed by Moody’s Analytics, Japanese investors may have sold some foreign bonds, most likely Treasuries, not in sufficient quantities to account for the yield spike, the analytics company wrote in a note.
Moody’s Analytics’ head of Japan and frontier markets economics, Stefan Angrick, stated that between March 30 and April 12, “weekly statistics on international securities flows show major Japanese investors were net sellers of foreign long-term bonds, most likely US Treasuries.”
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