Photo credit: uk.finance.yahoo.com

Bond Yields Rise Globaly, UK Notably Affected

In the early hours of trading, bond yields in major markets have experienced slight increases, with the UK witnessing the most significant rises. These modest fluctuations indicate a sustained increase in long-term borrowing costs.

The yield on 10-year UK gilts has risen by 2 basis points, or 0.02 percentage points, bringing it to 4.82%. In a similar vein, the yield on 30-year gilts has also climbed, reaching 5.38%.

Jim Reid, a market strategist at Deutsche Bank, commented on the ongoing situation, stating that the trend of rising bond yields shows little sign of slowing down. “The global bond selloff showed few signs of letting up over the last 24 hours, with long-term borrowing costs continuing to move higher across the board,” Reid highlighted. He pointed out that the UK is particularly noteworthy, as its 10-year gilt yield reached a new high of 4.81%—the highest since 2008—while the 30-year yield hit a post-1998 high of 5.37%.

Reid further emphasized that while the UK’s yields have attracted considerable attention, other nations are undergoing similar trends. “Even though the UK might appear the most striking in terms of when yields last traded at these levels, other countries have experienced a similar pattern too,” he stated.

In France, the 10-year yield has reached its highest point since October 2023, reflecting similar upward pressure. Germany’s 10-year bund yield has also seen an increase, reaching its highest level since July. Meanwhile, in the United States, the 10-year Treasury yield has stabilized but remains elevated at 4.69%, poised to close at its highest level since April. Additionally, Japan’s 10-year yield has marked its highest point since 2011.

Source
uk.finance.yahoo.com