10-Year Treasury Yield is now 4.28%, the highest level since October 2007
From a total return perspective, the 10-Year Treasury Bond is now down 1% in 2023, on pace for its third consecutive negative year. With data going back to 1928, that's never happened before. Source: Charlie Bilello
Saudi Arabia reduced its US treasury holdings by $3.2 Billion in June to the lowest level in nearly 7 years.
Source: FT
The yield gap between 10y US and Chinese government bonds is now >160bps, widest since 2007
Source: Bloomberg
China's credit landscape under stress!
Ever since the shockwaves of the #CountryGarden upheaval, the Chinese credit landscape has been undergoing a seismic shift. The credit default swap (#CDS) market tells a compelling story - #China's 5-year CDS is on a relentless rise (+25bps), and the Markit iTraxx Asian ex Japan #InvestmentGrade index is soaring (+30bps). Foreign investors are strategically repositioning, swiftly #divesting their holdings in Chinese #assets, particularly on the domestic front. Can the #PBOC orchestrate the necessary #stimulus maneuvers to put an end to this spiral of uncertainty?
We are approaching quite a formidable global #debt maturity wall...
Source: Markets & Mayhem, Morgan Stanley
From T.I.N.A (There Is No Alternatives to Risk assets) to T.A.R.A (There Are Reasonable Alternatives)... 6-months US T-bills yield 94bps more than the S&P's earnings yield...
Source: Bloomberg
From T.I.N.A (There is No Alternatives to risk assets) to T.A.R.A (There Are Reasonable Alternatives, i.e bonds)
Three years ago in August 2020, the S&P’s dividend yield (in red below) was 1.8%, almost 50 bps higher than the highest yield on the treasury curve. Every treasury note with a duration shorter than 5 years had a yield below 0.2% and the 1-month was almost ZERO. Fast forward to today and the S&P’s dividend yield of 1.55% is 260 bps lower than the lowest point on the treasury curve right now (the 10-year at 4.15%). And the 1-month T-bill yielding at 5.34% is 380 basis points higher than the S&P’s dividend yield. Source: Bespoke
The comeback of bond vigilantes: US 10y real rates have jumped to 1.77%, almost the highest level since 2009
Source: Bloomberg, HolgerZ
