Impacts of war push securities to historic surges around the world
The war in the Middle East has put severe pressure on bond markets around the world.
In the United States, Treasury yields soared, with the 30-year T-Bond reaching its highest level in almost two decades. The yield on the 30-year US Treasury note reached 5.17%, the highest level in the last 19 years.
To understand the scale of the movement, interest rates went from levels between 1.9% and 2.1% in 2021 to this current level, reflecting an abrupt appreciation over the last few years.
The United Kingdom records the worst result since 1998
The worsening is not restricted to the United States. Treasury bonds in other countries are also at decades-highs. In the UK, 30-year gilts reached 5.7%, the worst result since 1998.
The movement is attributed both to the impacts of the war in the Middle East, which changes the dynamics of inflation and public spending, and to the fear that large economies have their public accounts out of control and without the capacity for correction in the short term.
The English Central Bank, the BOE, needed to maintain its interest rates to combat inflation, contributing to this structural rise in yields.
Japan breaks historic record in 30-year bonds
Japan, an economy historically marked by low interest rates and episodes of deflation, also did not escape the global movement.
JGBs, Japanese 30-year bonds, went from levels between 0.6% and 0.7% to 4.11%, beating the highest result in history for this maturity.
The surge in Japanese bonds from 2020 represents a significant change in the country's financial scenario, which for decades has lived with yields close to zero.
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Source: CNN