Bonds 06 (Oct 23 - Dec 26)

[behappyalways]

*JAPAN 10-YEAR YIELD RISES TO 1.4%, HIGHEST SINCE 2010
https://x.com/zerohedge/status/1891694766393364953

[behappyalways]

Inversion of U.S. bond yields adds uncertainty to U.S. economy?!

美債殖利率倒掛 美國經濟增添不確定性?!｜20250301｜‪@inewsplus‬

https://m.youtube.com/watch?v=bxosTHLZX_w

[behappyalways]

Europe, the land where government deficits actually cause borrowing costs to rise
https://x.com/JackFarley96/status/1897304215979991078


ITALY’S 10-YEAR YIELD RISES ABOVE 4% FOR FIRST TIME SINCE JULY
https://x.com/zerohedge/status/1897609818979852616

[behappyalways]

*JAPAN 10-YEAR YIELD RISES TO 1.565%, HIGHEST SINCE 2008
https://x.com/zerohedge/status/1898947240846033318

[winston]

The world suddenly has a plausible alternative to US Treasuries

By Greg Ritchie, Michael Mackenzie & Mia Glass

In Germany, the 10-year bund at 2.61% reflects the prospect of a flood of bond issuance as the government ramps up defence spending.

Meanwhile, the rate on 10-year Japanese bonds has soared after spending years around zero and is now around 1.25%.

While both are still well below Treasury yields, they’re at levels that makes them look more attractive than Treasuries to European and Japanese investors who hedge their dollar exposure when buying US securities. That might entice investors to shift allocations to their home markets.

Deutsche Bank warns of a “confidence crisis” in the dollar, while UBS Group AG sees a shot in the arm to the euro’s status as a global reserve currency.

Investors are bracing for Europe to play a bigger role in global markets as competition for capital heats up.

One early test comes Tuesday, when the US government is set to sell US$58 billion (RM260.13 billion) of three-year securities, followed by 10- and 30-year maturities later this week.

Germany kicked off the shift in early March, when it announced plans to unlock hundreds of billions of euros for defense and infrastructure. Bund yields soared as investors priced in a flood of bond issuance to pay for the spending.

Source: Bloomberg

https://theedgemalaysia.com/node/750651

[winston]

Alarm bells ring over US Treasuries fire sale

The exodus from longer-dated US Treasuries accelerated, fueling the biggest sell-off since 2020 in what are supposed to be the world's safest assets.

The yield on 30-year Treasuries briefly soared above 5 percent with investors increasingly worried US President Donald Trump's tariffs, which kicked into effect yesterday, will send the economy into recession and limit the Federal Reserve's ability to respond by also igniting inflation.

In the past three trading sessions, the 30-year yield has jumped by about 40 basis points, or 0.4 percentage point, the biggest increase since November 2020.

The long-term rate was up two basis points to 4.79 percent yesterday, having earlier surged as much as 25 basis points.

Part of the unease was a lackluster auction of three-year debt on Tuesday, which added to nervousness ahead of a US$39 billion (HK$304.2 billion) 10-year auction and a 30-year sale.

Some investors speculated that global reserve managers, for example China, could be re-evaluating their positions in US government debt given the seismic impact of Trump's trade policies.

Such a move would send a strong signal that Treasuries are no longer the haven of old, but such trading is rarely telegraphed in real time.

Both China and Japan have been reducing their Treasuries holdings for some time, at least according to official data.

Goldman Sachs said earlier that China may dispose of US dollar-denominated assets to defend the yuan and retaliate against the US duty hikes.

Another theory has been that hedge funds being forced to rapidly unwind positions, like in the case of the basis-trade blow-up of 2020, might also be fueling additional market turmoil.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... -fire-sale

[winston]

Maturing Debt

In 2025, the U.S. government must refinance $9.2 trillion in maturing debt. Some $6.5 trillion of that comes due by June.

By introducing sweeping tariffs, the administration is creating precisely the kind of economic uncertainty that drives investors toward safer assets such as long-term U.S. Treasuries.

When markets are spooked, capital exits risk and equity assets (as we see with the stock market collapse) and piles into safe assets, primarily the 10-year U.S. treasury bond. That demand pushes yields lower.

It is a counter-intuitive move, but a calculated one. Some have called it a "detox" for the overheated financial system.

Source: Investor Place

[behappyalways]

U.S. debt in exchange for 100-year zero-interest bonds?
Yang Jinlong: It is equivalent to defaulting on debt

美債換百年零息債？ 楊金龍：等同倒債

https://m.youtube.com/watch?v=BnkZ1VNlz ... gAo7VqN5tD

[behappyalways]

Oof. We just saw the largest foreign selling of US corporate bonds since the COVID crash. What are they seeing that they want to avoid?
https://x.com/Mayhem4Markets/status/1913912189519339963

[behappyalways]

Alarm bells for Scott Bessent?!
https://x.com/crossbordercap/status/1914607487413629195


We now have hard data showing major Japanese investors sold foreign bonds in size the week of tariff "Liberation Day."
https://x.com/JackFarley96/status/1914614946752598284