- The German 10-year Bund yield soared to as high as 0.70% earlier, but has since retreated to 0.60%, up one basis point on the day. 10-year yields in Spain and Italy flew to above 2%, but are now sharply lower on the session at 1.73% and 1.78%, respectively.
- The U.S. 10-year yield hit 2.30% during this period, and has now also pulled back to 2.22%, off two bps on the session.
- "This Bund [yield] rally has caused a great deal of dislocation for fixed income investors," says the team at Barclays, noting a rise in yields of this size (here's a chart) has occurred just two other times in the past 15 years, and pointing to only 5% in a recent survey saw bond yields higher than 50 bps by the end of June.
- The moves in Germany and elsewhere are classic "pain trades," says HSBC's Steven Major. "The pain trade is a steeper curve, so given what happened in the past few weeks, this pain could have been excruciating."
- Source: Bloomberg
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