La deuda de EEUU, de amenaza para los mercados a refugio

The U.S. public debt, once a primary cause for market concerns, has transitioned into the premier refuge during recent widespread deleveraging episodes. The quarter-end portfolio adjustments were initially swayed by a genuine threat in late September. The required return on U.S. sovereign debt with a ten-year maturity approached 5%.

Historically, this has been considered a red line for other markets, including the variable income sector. On the same day of the quarter's change, the yield on the U.S. ten-year bond surpassed the 5% threshold. Fear of limited fiscal discipline under the Trump administration fueled investor doubts about U.S. bonds. The surge in the yield of its debt continued to exceed the 5.30% peak since 2007 during the onset of the financial crisis.

Just two weeks after peaking, U.S. debt costs retreated amid a wave of purchases. Turbulence in French debt and a rally driven by artificial intelligence accelerated the search for refuge. Tech stocks declined as disappointing earnings reports raised concerns about a slowdown in artificial intelligence. Investors grew increasingly uncertain about the profitability of large-scale investments.

This caution led market participants to flock towards U.S. Treasury bonds, viewed as safe havens, resulting in a decline in their yields. Concerns shifted from U.S. debt to French debt. The wave of sales of French bonds pushed its ten-year bond yield far above 5%, reaching near-record highs in 2002. Political instability, social protests, and difficulties in managing the budget deficit heightened investor distrust, as explained by Tressis analysts.

Yesterday's session further aggravated the French debt crisis, with the ten-year bond yield surpassing the 5.10% threshold and marking a new milestone. For the first time since 2013, the cost of French debt exceeded that of U.S. debt. For the first time since 2013, the cost of French debt exceeded that of U.S. debt. The outward flight to safety characteristic of market tension episodes once again found a preferred destination in U.S. debt.

Another classic safe-haven asset, gold, continued to lag due to the dollar's strength and central bank pressures. Its slump further cleared the path for U.S. bonds to absorb deleveraging from both variable income, with tech stocks at the forefront, and European fixed income. The result in recent sessions is that the return on European sovereign references has risen, led by the French curve tension, according to Norbolsa analysts.

Its contagion potential exacerbates the situation. Renta4 notes that France's issue is now spreading to Italy and Bulgaria. Energy pressures from rising oil prices convert into another factor worsening France's debt outlook, having less impact on U.S. debt due to its lower energy dependence. Today's agenda may add another twist to the pressures facing French sovereign debt.

Moody's is set to announce its updated rating for France today, and analysts do not rule out a rating downgrade that could reinforce the investor flow, once again, towards U.S. debt.