U.S. bonds are on track for their steepest declines since the 2008 crisis. The largest increases are seen in yields on longer-term maturities. Part of this move stems from a significant capital shift from the equity market into the bond market, creating a sharp drop in yields that has been entirely erased over the past three sessions.
10-year yields are now moving back above the consolidation zone from the first half of March and currently exceed 4.44%. There is speculation that the recent yield movements are driven by foreign institutions selling U.S. debt. A major supply-driven move, following a partial decline in demand—particularly visible late last week—weighs on U.S. bond valuations.
Additionally, for foreign institutions (e.g. from China), the sell-off in U.S. debt may also be tied to uncertainty surrounding the stability of U.S. international relations.
Such rapid changes in 10-year Treasury yields have not been seen since the 2008 crisis. Meanwhile, the change in 30-year yields (if sustained until the end of the session) would mark the largest 3-day increase since 1982.
In just a single day, long-term bond yields rose by nearly 15 basis points. Source: Bloomberg Finance L.P.
10-year yields return above 4.44%. Source: Bloomberg Finance L.P.
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