Yield on 10-year US government bonds rises amid global sell-off — CNBC

In the United States, government bond yields edged higher on Friday after a week of a global sell-off in debt securities. The yield on benchmark 10-year US Treasury notes rose by less than one basis point to 5.17%, after reaching its highest level since June 2007 the previous day.

US bond performance

The yield on 30-year US bonds was virtually unchanged at 5.463%, after jumping to levels not seen since 2004. The yield on two-year securities was also almost unchanged at 4.899%. One basis point equals 0.01 percentage points, and bond prices move in the opposite direction to their yields.

CNBC reports on the market situation. Throughout the week, investors assessed the global bond sell-off: yields on Japanese government securities, British gilts, German bunds and other eurozone countries' bonds reached new highs. At the same time, yields on eurozone and Japanese government securities declined slightly on Friday.

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Factors putting pressure on the market

The rise in US yields was supported by hawkish comments from Federal Reserve Board Governor Michael Barr. In a speech on Wednesday, he said that “further policy adjustments” may be needed to return inflation to its target level.

Among other factors, CNBC cites persistently high oil prices and purchasing managers' index data, which reached their highest level in more than four years. According to CME FedWatch, traders put the probability of a rate hike in October at nearly 71%.

Investor expectations

On Friday, market participants awaited University of Michigan consumer sentiment data and durable goods orders statistics. ING analysts Padhraic Garvey and Benjamin Schroeder noted that the market has already priced in a sufficient share of concerns over rate hikes and inflation, but government bond yields may remain under pressure because of public debt dynamics.