Oportunidades y riesgos del bono de EEUU cerca del 5%

The current level of the U.S. bond is threatening the country's economy but presents an investment opportunity. European debt suffers more due to energy dependence. Recent market turbulence has brought the profitability of the U.S. bond close to the 5% mark (it stood at 4.78% yesterday, the day before Labor Day). For Wall Street, this yield poses a threat. However, bond investors see it as a lucrative opportunity, according to XTB.

The last time the U.S. 10-year bond approached 5% was in July 2007. In October 2023, the U.S. debt title touched 4.99% and hovered at the 5% threshold after the U.S. Federal Reserve implemented its most aggressive monetary policy in decades in March 2022. So far this year, the bond's profitability has increased by more than 60 basis points. While it's good for savers, there are other implications.

The ten-year maturity has yet to reach 5%, but its proximity is raising concerns about its potential consequences for the economy and the stock market, analysts from XTB note. If U.S. debt surpasses this level and remains above it for a prolonged period, the marginal cost of issuing new debt could approach or exceed the expected nominal growth of the economy, they argue.

This would not immediately render U.S. debt unsustainable, as the average interest rate paid by the Treasury is lower and gradually increases as maturities are refinanced. However, it would accelerate the growth of the interest bill and reduce the budgetary margin for the government, they add. The speed at which the Treasury surpasses 5% would also be important.

If the Treasury surpasses 5% on ten-year bonds in November, its profitability would have increased by more than 75 basis points in just six months. According to XTB, historically, such magnitude movements have significantly hardened financial conditions, and in some cases, coincided with the end of bullish markets.

The 5% mark is not a line that automatically triggers a decline, but surpassing it too quickly could alter the relationship between risk and return for all assets, they stress. What poses a risk to the American economy and the stock market represents an opportunity for investors. Buying the U.S. bond at the current level can offer protection to new investors, XTB suggests.

The current situation is especially detrimental to European fixed income. Europe's energy dependence, coupled with political risks in the continent's countries, is putting pressure on debt yields. Even Germany, which has seen the highest yields on its bonds since 2011, is affected.