The biggest elephant in the room IS NOT stocks, it is the bond market
The US 10-year Treasury yield spiked +13 basis points on Friday to 4.38%, the 2nd-largest single-day jump since the April 2025 Liberation Day sell-off. Since early March, the 10-year yield has surged +45 basis points, the fastest rise in nearly a year. The bond market sell-off is being driven by soaring oil prices fueling inflation fears, hawkish signals from the Fed and Bank of England, and hedge funds being forced to unwind leveraged bond trades at a loss. If yields rise another 20 to 30 basis points from here, it could trigger a liquidation cascade across all asset classes as institutional trading desks would have no choice but to slash risk exposure, similarly to April 2025. Source: Global Markets Investor
Market action in fixedincome wasn't great yesterday.
Treasuries (upper chart) were a bloodbath yesterday with yields up 5-8bps (long-end lagging, now up 10bps on the week)... High Yield OAS spreads (lower chart) have begun to widen (credit underperformed stocks yesterday) Something to keep a very close eye on. Source: zerohedge
Bloomberg Commodity index $BCOM vs. US 10-year breakevens is now trading with a massive gap
A divergence we rarely see. Source: TME, LSEG
A very important development for global markets ‼️
➡️ JGBs long-term bond yields are moving LOWER (see below the 30Y over the last month) while the Yen is firming against dollar (From nearly 158 on Sunday evening to roughly 155 this morning, it’s been a significant move in USDJPY). Takaichi landslide victory - which implies fiscal stimulus & tax cuts - hasn't trigger a bond or yen crash. Quite the contrary. Meanwhile, Japan equities continue to move upward. This is quite a compelling development overall for Japan macro & markets landscape.
GOOGL selling 100-year debt 😯
Source: Bloomberg
Alphabet has attracted >$100bn of orders for a bond sale that’s expected to be ~$15bn, BBG reports, citing people with direct knowledge of the matter.
The demand is among the strongest ever seen for a corporate bond offering, showing investor hunger to buy debt tied to the AI boom. Alphabet has also mandated banks for potential Swiss franc and Sterling debt offerings, including a rare 100-year Sterling note. Source: Bloomberg, HolgerZ
China urges banks to curb us treasuries exposure on market risk
Source: Bloomberg
It looks like negative interest rates are returning to Switzerland...
Government bonds with maturities of up to 4 years are now yielding negative returns. Source: HolgerZ, Bloomberg
