Bond yields climb worldwide while China's stay put
The US 10-year Treasury yield rises to 5.32% as a bond auction and Fed minutes loom, while Chinese yields hold steady.
Published
Government bond yields are rising across major markets on Wednesday. The US 10-year Treasury yield climbed to 5.32%, up 0.03 percentage points from the previous session, according to Trading Economics.
The move comes as investors watch a closely tracked 10-year Treasury auction and the release of Federal Reserve meeting minutes later today, according to The Blye Sheet. The newsletter also reported that European sovereign debt remains under pressure, with UK long-term yields continuing to push higher and French assets weighed down by concerns over the country's fiscal trajectory. Those markets have been volatile in recent sessions: on October 1, the 10-year UK gilt yield jumped as high as 5.53% before pulling back, and French bond yields swung sharply the same day, the Associated Press reported.
China is the exception. Its bond yields have stayed stable even as yields climb elsewhere. That steadiness lines up with the easing bias Beijing has been running, including a prime rate cut on September 29 and an expansion of relending facilities. The divergence reflects weaker domestic credit growth and a central bank still focused on targeted support rather than following the rise in global rates.
That leaves Chinese yields decoupled from the pressures pushing US and other developed market yields higher, though the pattern says nothing about where long-dated Treasury yields head from here.