Treasury Yields Fall, Because That’s What Bond Yields Do By Michael Aneiro Bond yields in the U.S. and Europe alike continue to tick lower Wednesday, because – well, because that’s what bond yields do these days. Market moves come with the caveat that late-August trading days generally mean pretty low trading volumes. But in the absence of any major catalyst, the default direction for momentum seems to be yields moving lower. In Europe, sovereign yields continue to plumb historic lows. Markets took a dovish read on ECB President Mario Draghi’s comments at last week’s Jackson Hole symposium and ran with it, pushing yields on German 10-year bunds briefly below 0.9% for the first time ever today, to 0.897%, before retreating to 0.910% at last read, per Tradeweb data. Draghi’s ECB is increasingly worried about inflation. That German bund yield is the anchor weighing on global bond yields right now, with global flows searching for better return moving into U.S. Treasuries instead. That’s pushed the 10-year Treasury note price up 6/32 today and lowered its yield to 2.370%, and the 30-year bond is up 15/32 to yield 3.128%, a shade above its 2014 low. And the Japanese 10-year yield continues to languish at 0.42%. Back in Europe, yields on 10-year Italian (2.346%) and Spanish bonds (2.088%) set new lows and once again trade below comparable Treasury yields, which is pretty extraordinary given the respective states of their economies.
Posted on: Thu, 28 Aug 2014 04:04:33 +0000
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