- US 10-year Treasury yield rose to 5.34%, highest since 2002, surpassing 2007 peak
- Global bond selloff driven by rising oil prices linked to Middle East conflict
- UK 30-year bond yield hit 6%, a level not seen since 1998, amid global market pressure
The US benchmark yield rose to its highest level since 2002 as elevated oil prices drove a renewed selloff in global bonds, Bloomberg reported.
The yield on the 10-year Treasury yield climbed as much as six basis points to 5.34% on Thursday, crossing its 2007 peak.
The development comes days after the rate of 30-year US bonds hit a 24-year high.
Government debt has been risong across the world as higher oil prices, driven by the war in the Middle East extend across the global economy, leading investors to expect futher interest rate hikes by central banks. High government borrowing and strong investment in artificial-intelligence infrastructure is adding to the demand for capital, raising borrowing costs.
Global government bonds recorded their worst quarter since 2024, according to a Bloomberg index. The sell-off on Thursday also pushed the UK 30-year bonds to 6% for the first time since 1998. This level is expected to be seen in the US treasury market, the report said citing some analysts and investors. Further, investors will also look for indications on the US economy's health and the next Federal Reserve moves follwoing Friday's payroll numbers which are estimated to grow 85,000 in September, according to a Bloomberg poll of analysts.
On Thursday, a long list of Fed speakers are scheduled with six speeches lined, including Governor Chris Waller. Traders expect the Fed to announce four more quarter-point interest-rate hikes by the end of 2027.
Meanwhile, Wall Street veteran Jim Bianco witnesses an opportunity as Treasury Yields rose. For the first time in six years, he is turning bullish on Treasurie, while long-time bond investor Chris Iggo said bonds are expected to rebound after four tough years. RBC BlueBay Asset Management CIO Mark Dowding said the selloff in the global bond market is overdone, the publication reported.
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