Anleihemarkt: Ausverkauf am Bondmarkt – zehnjährige US-Anleihe bei 5,1 Prozent

In the largest and most important bond market in the world, US Treasury bonds were repeatedly offered on the market on Wednesday, causing yields to rise to the highest levels in years. European government bonds also faced pressure in this context. The ten-year US benchmark bond rose to 5.13 percent mid-week, the highest level since the 2007 financial crisis.

The yield on ten-year bonds has been climbing for seven months in a row, the longest upward movement since 2011. Similarly, yields on other maturities have also increased to multi-year highs. Two-year US bonds rose by 12 basis points to 4.889 percent, and the five-year US Treasury note was briefly quoted at just over 5.0 percent.

The yield on the ten-year US Treasury bond, which serves as a benchmark for corporate bonds, climbed up to 5.13 percent, the highest since 19 years. The 30-year US Treasury bond rose to 5.4 percent, only about four basis points below the 2004 peak. The reasons for the sell-off on Wednesday were driven by a series of data and developments.

The Purchasing Managers' Index for the manufacturing and services sectors, released by S&P Global, indicated that economic activity reached its highest level in over five years in September. However, S&P noted that this growth came with serious supply chain bottlenecks, suggesting that companies are gaining pricing power, which could raise inflation concerns.

Federal Reserve Governor Michael Barr fueled further worries about a more restrictive monetary policy from the Fed during a regional bank meeting in Chicago. He stated that further interest rate hikes are likely necessary to bring inflation back to the central bank's two percent target. US inflation has already exceeded the Fed's target for over five years.

Last week, Fed Chair Kevin Warsh sharply raised the interest rate range to 3.75-4.00 percent, adopting a more hawkish tone. Now, speculation is growing about a possible interest rate tightening cycle in the market. Concerns about a more aggressive Fed rate cycle led to declines in bond prices, causing yields to rise accordingly.

Economic data was also released against the backdrop of rising oil prices due to the Iran conflict, with Brent crude prices reaching over 100 dollars per barrel by mid-week. Investors closely monitored the auction results for five-year US Treasury bonds on Wednesday. Early bond price declines were intensified by the afternoon auction of $70 billion worth of five-year bonds, which achieved the highest auction yield since 2006.

This indicates weaker demand, meaning investors are demanding higher yields. The yield required to close the auction was 5.033 percent, more than three basis points above the level expected before the bidding period ended. This was the second-worst auction for five-year bonds since record-keeping began in 2018, only worse than the June 2022 result following the Fed's first set of significant rate hikes in over three years.