US and France like ships passing in the night at 5% think.ing.com/articles/rates… The US 10yr yield gapped back below 5% with some conviction. We're not convinced it keeps on going. More likely it ultimately reverts up again. Brent oil pushed above $110 for the first time since May, but weaker market sentiment prevented a hawkish repricing. French bond spreads continue to surge, and we struggle to see catalysts to push against this

Rates Spark: Don’t expect a break back below 5% think.ing.com/articles/rates… We think the US 10yr stays above 5%, and in fact heads back up to 5.25%. That won't help the eurozone, which continues to grapple with the problem that is France. Probably overdone, but far from over

Here’s how US Treasury Secretary Bessent could tempt the 10yr yield back down think.ing.com/opinions/heres… Most of the rise in long-dated rates reflects traditional printed inflation, reactive rate hikes and a persistence of higher real rates. So, we've actually not had a US fiscal-related selling tantrum. If we did, and it was severe, the US Treasury could feel forced to take more extreme action. We examine how that might look

Here’s how US Treasury Secretary Bessent could tempt the 10yr yield back down think.ing.com/opinions/heres… Most of the rise in long-dated rates reflects traditional printed inflation, reactive rate hikes and a persistence of higher real rates. So, we've actually not had a US fiscal-related selling tantrum. If we did, and it was severe, the US Treasury could feel forced to take more extreme action. We examine how that might look

US 10yr continues to target 5.25%+ think.ing.com/articles/rates… The overshoot to the 5.25%-5.5% area for the US 10yr yield is ongoing. The front end paused after valuations looked stretched, but resilient macro data, elevated energy prices and inflation pressures generally continue to pressure yields higher

The overshoot commences think.ing.com/articles/rates… A good series of PMIs has helped nudge global rates higher. It's taken us above some key levels, namely 5.1% on the US 10yr and 3.5% on the Euribor 10yr. And the move is likely far from over. To add insult to injury, we note that debt dynamics don't necessarily benefit from this

Rates Spark: US 10yr likely gets above and stays above 5% ahead think.ing.com/articles/rates… Chair Warsh delivered on the market discount, and yes indeed, did so after all the talk that this Fed would do things differently. It was still an eloquent performance. But it won't rescue the back end of the curve. We identify 5.25% as a next target for the US 10yr yield.

Rates Spark: How about a 50bp hike? Now that would be quite the statement think.ing.com/articles/rates… Close your ears Mr President, but 50bp might be the right move, as it could be more fitting with how Chair Warsh might like to pursue policy. We're not calling for it, as we go for 25bp. But, is Chair Warsh just going to deliver the market discount? Really? After all that 'we'll do things differently' talk? This is why this meeting is so intriguing

Rates Spark: Gimme five think.ing.com/articles/rates… We've had a brief look at 5% on the 10yr yield. Now we wait for the Fed. Logic would suggest that a rate hike should calm the back end. However, the back end is super flighty. Delivery of a 25bp hike in a way validates what the back end has been doing in the past number of months, and in that sense could just as easily be an excuse to break back above 5%, and keep on going

Rates: Global bond markets at a tipping point think.ing.com/articles/globa… If the music stopped now, the absolute level of long-end yields for many issuers looks reasonably fair. The problem is the music is still blaring. A lot is going on, and most of the pressure continues to point upwards for long rates. That does not have to be a drama, but then again, it could become one should it get pushed too far

Rates Spark: So how bad could this whole thing get? think.ing.com/articles/rates…
Here’s a question – how bad could things get for the back end? We map out some causes and affects, and draw some historical parallels. We don't call for it, but the height of the dot.com boom saw the US 10yr real yield hit 4%. And the 10yr nominal yield? 6%

Rates Spark: Curve influencers think.ing.com/articles/rates… Warsh and Bessent – the bond influencers. But bigger market pressures should dominate. Tactically, the oil price drives much of the short-term moves in rates. Structurally, it's the global rise in real rates – that is the real influencer

Warsh guides forward without forward guidance think.ing.com/snaps/warshs-h… We got far more here from Chair Warsh then we were getting from his two FOMC meetings to date. He was keen not to provide forward guidance, but his words smacked of forward guidance; he was net hawkish. That does not guarantee anything, but front end rates are higher and back end rates lower as a reaction. Seems fair. Nothing on the Treasury buybacks, as expected

Rates Spark: Why 4.75% is a natural fit for the 10yr yield think.ing.com/articles/rates… We've had the opening salvo from the US Treasury, and so far so good. Long-end yields are down and swap spreads tighter. But it's no game changer, as the underlying pressures remain. Friday's Jackson Hole Symposium offers a nice distraction. But post that, as the realisation dawns that we're none the wiser on the Fed, long-end pressure is primed to re-build

Rates Spark: It’s about bigger buybacks, not how its financed think.ing.com/articles/rates… Deployment of the Treasury General Account as a financing mechanism for buybacks is an option. But really, it's no different to structural financing through bills, especially as the buffer is re-built. It's all about timing. That apart, eurozone growth may not grab headlines, but is beating consensus, adding to the upward pressure on euro rates

Can the Treasury simply use its deposit account to finance Treasury buybacks? think.ing.com/snaps/can-the-… CNBC came out with a story this morning along the lines that the Treasury could potentially use the Treasury general account (TGA) to help finance Treasury buybacks (dealt with here). Big deal or no? We'd argue no, not really. Why?

Rate tensions in Latin America think.ing.com/opinions/mappi… Colombia and Brazil have built large rate buffers. Of the two, Colombia is more primed for eventual cuts. Mexico and Chile have zero-to-negative rate buffers. Both are market-primed for eventual hikes. If the Fed does not hike, but instead cuts in 2027 (our view), there is a material effect to be had on realised outcomes