Bond market selloff jolts global investors as 'tantrum' hovers
(ed: or it could be the Asian unwind of the YUUUGE Basis Trade (long) that was put on for the 2nd half of last year)
Jan 8th, 08:54:16
By Amanda Cooper, Yoruk Bahceli and Gertrude Chavez-Dreyfuss
LONDON/NEW YORK (Reuters) -A sharp selloff in some of the world's biggest government bond markets and a continued rise in the dollar sent shockwaves through financial markets, with the pain seen deepening as uncertainty grows over U.S. President-elect Donald Trump's policies.
On Wednesday, the 10-year Treasury yield, underpinning trillions of dollars in daily global transactions, jumped to above 4.7%, their highest since April, and UK peers hit their highest since 2008.
Germany's 10-year Bund yield rose on Wednesday as well to a more than five-month high amid accelerating euro zone inflation, and elevated bond supply. The yield, the euro zone benchmark, was last little changed on the day at 2.521%, after hitting 2.534%, its highest since July last year.
This unleashed a fresh wave of selling in currencies against the greenback, including sterling, which slid more than 1% before slightly recovering, and the euro, which was headed closer toward the $1 mark.
The S&P 500, which rallied post Trump's win, has recently started to falter, although it has marginally recouped some of those losses.
Trump, in a press conference at Mar-a-Lago on Tuesday, decried high U.S. interest rates despite the Federal Reserve being in the midst of an easing cycle.
"Inflation is continuing to rage, and interest rates are far too high," the president-elect said.
https://m.piqsuite.com/reuters/bond-market-selloff-jolts-global-investors-as-tantrum-hovers-2025-01-08-21-43-23