Global Bond Yields Fall on Central Bank Purchases

U.S., Japanese and Australian government bonds tumbled on speculation unprecedented central bank efforts to spur economic growth will curb demand for the relative safety of government debt.

Treasury 10-year yields, benchmarks for mortgages and corporate bonds in the U.S. and for government borrowing around the world, climbed to the highest level in almost seven weeks. Federal Reserve Bank of Kansas City President Esther George said the U.S. economy may grow 2 percent this year, spurred by central bank stimulus that threatens to eventually push up inflation expectations. The Bank of Japan announced an easing program in April, and the Reserve Bank of Australia cut interest rates to a record low last week.

U.S. 10-year yields climbed two basis points to 1.92 percent as of 7:01 a.m. in London, according to Bloomberg Bond Trader data. The price of the 1.75 percent security due in May 2023 declined 6/32, or $1.88 per $1,000 face amount, to 98 15/32. Yields reached 1.94 percent, the most since March 26.

In Japan, five-year yields touched 0.34 percent, the most in 13 months. Ten-year rates advanced as much as 11 basis points to 0.8 percent, the highest level since Feb. 6.

Ten-year yields advanced for a fourth day in Australia, rising two basis points to 3.26 percent.

The 10-year rate in Singapore climbed to 1.51 percent, set for the highest close since April 3, from 1.46 percent on May 10. A basis point is 0.01 percentage point.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu