Saxo Bank fokuserer på de stigende renter verden over. F.eks. er 10-årige australske statsobligationer steget kraftigt siden nytår, fra 1 til 1,4 pct. Hvis renterne på de længere løbende statsobligationer bliver ved med at stige, kan det dæmpe aktiemarkederne. Nu er tiden igen inde til at følge den amerikanske centralbank nøje for at se, hvordan Fed vil reagere på renterne og inflationen.
What is going on?
The mood has turned more cautious across global equity markets after US treasuries sold off heavily tuesday, taking US yields sharply higher to new highs for the cycle.
Yields are rising globally, not just in the US as reflation bets abound. UK Gilt yields have also risen sharply and those in Australia and New Zealand also rose sharply overnight, with an Australia 10-year government bond now yielding 1.40%, up from around 1.00% at the beginning of the year.
At some point, rising long yields, if they continue higher, will temper asset price gains as valuation models for equities will demand far higher earnings yields than in a lower rate regime as yields rise.
What are we watching next?
US yields and FOMC minutes up tonight – it is tough to over-emphasize the importance of safe haven yields and the significance of the recent, and especially yesterday’s move higher in major US treasury benchmark yields, as the 30-year T-bond yield leaped 9 bps and the 5-year yield nearly matched with a rise of 8 bps.
While some Fed members have recently stated that current yield levels are not a concern, that was before this latest spike, and the pace of recent yield rises inevitably has their attention, so Fed watching has become a critical pastime again.
It is unlikely that much to-do about yields will be made in this evening’s FOMC minutes, as they are from a meeting held three weeks ago, but still the minutes will be worth scrutinizing for any hint of whether the Fed is concerned about the scale of treasury issuance this year that is far beyond the level of their QE purchases and whether there is any discussion or sense of urgency around guiding expectations toward “yield caps” or yield curve control (YCC) to ensure that yields don’t rise.
