Extremely Oversold: Global Long-Term Interest Rates

Remember back in June when investors were worried that yields on long-term US Treasuries were going to approach 6%? Well don't look now, but as most of you know, the yield on the 10-Year Treasury is now at 3.5%. Below we highlight the historical yields on selected long-term international treasuries. As shown, with the exception of Australia, since the Summer, yields for government debt have fallen sharply as bonds have rallied.

While sentiment towards lower yields has not quite mirrored the levels we saw towards higher yields in June, fixed income investors should be aware that long-term interest rates are currently at extreme oversold levels. A rise in yields, at least in the short term, should be expected.

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