By Caroline Grady 04-12-2020
In: hive-indicators | Rates

Where Can you Get Higher Bond Yields?

Resize text:


US yields are rising. The combination of growing optimism over a global recovery given vaccine progress, and the possibility of a US stimulus package have boosted risk appetite. US equities have also reached new highs this week, oil is edging higher, helped by the OPEC+ agreement to delay output increases, and dollar weakness has gathered pace. By contrast, European yields have moved deeper into negative territory (Germany now back at -0.6% and France at -0.3%) with the ECB expected to announce further asset purchases next week.

Is this rise in US yields a concern for emerging markets? The post COVID world of higher debt levels leave the potential for financing costs to become problematic and interest bills taking an ever greater share of government spending. But we are not there yet. The very low level of US rates leaves the recent move higher of little concern. And the search for yield is still significantly in EMs favour.

TO READ THIS HIVE INDICATOR
SUBSCRIBE TO MACRO HIVE PRIME

£39/month thereafter

For access to our Slack Chat Room, where we discuss all things markets with our researchers and subscribers

START YOUR FREE TRIAL


MOST READ

Homebuilders Are in A Sweet Spot (5 min read)

By John Tierney | Jun 03, 2021
The latest housing data was a source of both relief and worry. The relief is because slowing home sales perhaps indicate the US is...

2H Outlook: The Pause That Refreshes (10 min read)

By Jay Pelosky | Jun 01, 2021
As we approach midyear, Covid Speed’s breakneck pace seems to have slowed. Cross-asset markets have paused, with stable stocks, bonds...

Be Careful, Inflation Expectations Are Unanchored! (6 min read)

By Sam van de Schootbrugge | Jun 02, 2021
The Covid-19 crisis triggered a sharp reversal of capital flows to Emerging Market Economies (EMEs). Also known as a sudden stop...

PREMIUM CONTENT

Precious Metals Poised for a Historic Rally (5 min read)

By John Butler | May 25, 2021
Summary Multiple fundamental factors are coming together…

US