US 10-Year Treasury Yield Hits 1.9% as German 10-Year Bund Trades in Positive Territory for the First Time Since 2019; UK Inflation Hits 30-Year High

January 19, 2022 5:38 AM EST
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The selloff in bonds across the globe has accelerated this morning with the German 10-year bund finally returning to positive territory. The last time it traded above zero was May 2019.

The rise in bond yields across the globe comes on the heels of central banks preparing to start hiking rates.

“Bonds yields everywhere are in the crosshairs. It’s very much not being led by Europe ... I don’t think we are looking at a Eurocentric repricing here. It’s more of just the usual correlation we see between government bond markets and the big move higher we’re seeing in Treasury yields,” James Athey, senior investment manager at Aberdeen Standard Investments, told CNBC.

In the UK, the annualized inflation rate hit 5.4%, the highest level seen since March 1992 and up from 5.1% in November.

The BoE has already raised the benchmark interest rate by 15-basis points to 0.25% in December. The next policy meeting is in the first week of February.

In the meantime, the US 10-year yield hit 1.9% this morning before retracing to trade around 1.88%. Another leg higher is likely to extend the selloff in high-growth tech stocks and accelerate the growth-to-value rotation that has been seen in recent weeks.

By Senad Karaahmetovic | [email protected]

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Senad Karaahmetovic