FX Risk Keeping Opportunistic Bond Buyers Local, BNY Says

Soaring government bond yields are attracting dip-buyers eager to lock in lofty, long-term returns — but only within their own borders, according to BNY.

In the US, the 30-year Treasury yield now trades above 5% as rising oil prices catalyze fears of inflation, coupled with higher government borrowing estimates. In the UK, the 30-year gilt yield touched its highest mark since 1998 ahead of upcoming local government elections. And in Germany, the yield on 30-year bunds similarly trades near its highest mark in about 15 years, as expectations increase of a rate hike by the European Central Bank.