The 10-year Treasury yield is approaching 5%. What it means for income-seeking investors
Some great income-generating opportunities are emerging as bond yields move higher.
Chinese brokerage revenue jumped more than 50% in the first half of the year, buoyed by rising A-share trading activity. This surge in commission income led to a 23.5% average increase in net profit across 150 brokerages, according to China's Securities Association. Meanwhile, Hong Kong's Mandatory Provident Fund amassed a record HK$1.67 trillion in assets by the end of June, prompting policymakers to explore expanding investment options for the city's compulsory retirement scheme.
The Financial Services Development Council proposed allowing a portion of the fund to invest in alternative assets and infrastructure, aiming to attract more long-term mainland capital to invest globally through Hong Kong.
The Japanese yen reached a seven-month high of 153.63 per US dollar, its strongest level since February. Anticipated tighter monetary policy by the Bank of Japan bolstered the currency, as did speculation that Japanese investors might bring overseas assets back home, increasing demand for the yen. The US 30-year Treasury yield climbed to a 19-year high of 5.37% on Thursday, the highest since 2007, amid a global bond sell-off triggered by concerns over inflation and US government debt.
Despite the US Treasury's buy-back of approximately US$5.2 billion in 10- to 20-year bonds, short of its US$6 billion target, the benchmark 10-year yield rose to around 4.95%. Concurrently, the European Central Bank (ECB) increased interest rates by 25 basis points to 2.5%, the second hike this year, to combat persistent inflation well above its 2% target, driven by energy price hikes resulting from the Middle East conflict.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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