(Bloomberg) -- Treasuries fell as they reopened after Thanksgiving, following a slide in European bonds that was caused by concerns of a burgeoning supply and the potential that central banks will keep rates higher for longer.
US 10-year yields rose six basis points to 4.46% on Friday in Asia. That echoed a similar move in bunds after European manufacturing data came in stronger than expected and Germany moved to suspend a restriction on new borrowing.
“The US bond market has been impacted by higher European yields, following somewhat-better EU and UK PMI data, and the suspension of the German borrowing limit,” said Andrew Ticehurst, a rates strategist in Sydney at Nomura.
This month's sizzling rally in global government bonds is showing signs of stalling. Policymakers from Europe to the US and Australia are signaling elevated inflation may require restrictive policy settings rather than a shift to rate cuts. Germany's decision to remove the so-called debt brake also revived investor angst about a flood of global government bond issuance.
“Stable for longer is more the story rather than rate cuts,” when considering the policy outlook, Jason Pang, Asia FX and rates portfolio manager for JPMorgan Asset Management, said in an interview on Bloomberg television. “People are already priced in for rate cuts. The pain trade is actually the other way round on a near-term basis.”
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