US Treasuries: Long-end selloff extends to multi-decade highs – Deutsche Bank

Deutsche Bank’s Jim Reid describes severe stress in US Treasuries, with 10-year and 30-year yields pushing to post-2000s highs despite dovish PCE revisions. The report notes a relentless long-end selloff, rising real yields, and month-end positioning effects, as the bond rout that began with higher Oil and resilient growth continues to weigh on risk assets and fixed income.

Yields hit post-2000s peak levels

"The bond market stress continued, with the 10yr Treasury yield (+4.9bps) rising to another post-2007 high of 5.28%, whilst the Franco-German 10yr spread widened to a post-2012 high of 127bps."

"However, this dovish repricing didn’t hold further out the curve, with the 2yr Treasury yield closing +1.1bps higher on the day at 4.89% after trading as low as 4.825% after the PCE release."

"The 30yr yield (+6.3bps) saw an even bigger increase to a post-2002 high of 5.63%."

"The continued rise in yields saw equities soften after an initial post-PCE rally, before a further sharp fall in the final 15 minutes of trading left the S&P 500 -0.25% lower on the day despite trading +0.68% higher early on."