The value of U.S. Treasury Bonds plunged to fresh 52-week lows on Thursday morning, as yields surged amid a steep sell-off in sovereign debt.
Interest rates had held relatively steady over the previous six sessions, but the post-Trump bond purge is now once again continuing in earnest. Yields on 10-Year Treasuries climbed above 2.45%, nearly matching two-year highs set back in July 2015.
Short-term yields are soaring this morning as well. From Business Insider:
Thursday’s selling has the 2-year yield at its highest level since the fourth quarter of 2009 as traders continue to price in a Fed rate hike at the upcoming meeting on December 13/14.
Even international bonds are joining the sell-off now, too:
And the selling isn’t contained to just the United States. Yields are up across Europe with Germany’s 10-year higher by 2.8 bps at 30 bpd and the UK 10-year up 5.4 bps at 1.467%. Even Japan’s 10-year ticked up 0.8 bps, hitting 2.1 bps, its highest since February.
Clearly, something big is brewing within the bond markets, and it may just be a matter of time before the sell-off has a major effect on bringing U.S. equities down with it, as the post-Trump sector rotation continues in earnest.
The iShares Barclays 20+ Year Treasury Bond ETF (NASDAQ:TLT) fell $1.58 (-1.31%) to $118.42 per share in morning trading on Thursday. Year-to-date, the largest long-term Treasury bond fund has now fallen 1.66%.