Global bond yields continue to climb around the world as central bankers seek to control inflation in their respective countries by raising interest rates.
In the traditional sense, interest rates and bond prices generally move different directions, which in turn means that higher rates equal the value of falling bonds. Going even further, as bonds fall, yields rise. Consequently, the surge in global yields underscores investors’ concerns about a rising rate environment. The rate hike reflects that Wall Street is pricing in further hikes ahead, particularly at the short end of the curve.
US returns
Since the beginning of the trading year, the yield on the US 2-year Treasury (US2Y) has climbed 352 basis points to 4.28%. In addition, the 2-year is now hovering near highs not seen since August 2007. The yield on the US 10-year Treasury (US10Y) has increased by 241 basis points in 2022 and is flirting with 4.00% while it currently topped 3.9% on Tuesday, its highest since April 2010.
German returns
The long-term German 30-year Treasury yield hit a recent high on Tuesday as it traded above 2.00% for the first time since July 2014. The German 30-year now sits at 2, 08% and gained 190 basis points year over year. Date.
Yields in the UK
The UK 2-year gilt continued higher early on as it trades at 4.57% and rose 390 basis points in 2022. The UK 2-year gilt jumped on Monday as the pound fell at an all-time low against the US dollar. Now the UK 2Y is at its highest level since September 2008.
Treasury ETFs
See a group of exchange-traded funds whose price movement is linked to government bonds: (NYSEARCA:AGG), (NASDAQ: BND), (NASDAQ: TLT), (NASDAQ: IEI), (IEF), (SHY), (GOVT), (SHV), (BIL), (VGSH), (VGIT), (SCHO), (SCHR), (SPTL), (TLH) and (VGLT).
In broader financial news, major market averages trade higher on Tuesday as buyers stepped in for stocks as the dollar takes a breather.