Global bond yields push higher as central bankers look to fight inflation

A world globe marked with several national flag pins

Richard Drury

Global bond yields continue to surge across the world as central bankers look to get inflation under control in their respective nations by raising interest rates.

In a traditional sense, interest rates and bond prices characteristically move in differing directions, which in turn means higher rates equals bond values to fall. Taking it one step further as bonds fall, yields rise. Therefore, the pop in global yields outlines concerns that investors have about a rising rate environment. Rising rates reflect that Wall Street sees further hikes to come, especially with regards to the short end of the curve.

U.S. Yields

Since the beginning of the trading year the U.S. 2 Year Treasury yield (US2Y) has climbed 352 basis points to 4.28%. Additionally, the 2Y now hovers near highs not seen since August of 2007. The U.S. 10 Year Treasury yield (US10Y) on the other hand has increased 241 basis points in 2022 and flirts with 4.00% as it currently topped 3.9% on Tuesday, its highest point since April of 2010.

German Yields

The longer end German 30 Year Treasury yield notched a recent record high on Tuesday as it trades above 2.00% for the first time since July of 2014. The German 30Y now sits at 2.08%, and has picked up 190 basis points year-to-date.

U.K. Yields

The U.K. 2 Year Gilt continued its rise early on as it trades at 4.57%, and is up 390 basis points in 2022. The U.K 2Y surged on Monday as the Sterling dropped to its lowest level against the U.S. dollar in history. Now the U.K. 2Y sits at its highest point since September of 2008.

Treasury ETFs

See a grouping of exchange traded funds that have their price action tied to government bonds: (NYSEARCA:AGG), (NASDAQ:BND), (NASDAQ:TLT), (NASDAQ:IEI), (IEF), (SHY), (GOVT), (SHV), (BIL), (VGSH), (VGIT), (SCHO), (SCHR), (SPTL), (TLH), and (VGLT).

In broader financial news, major market averages trade higher on Tuesday as buyers stepped in for equities as the dollar takes a breather.

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.