「债市风暴」席卷美欧日，长债收益率逼近数十年高点

Original author: Dong Jing

Original source: Wall Street CN

The global sovereign bond market is experiencing its most violent selloff in decades, with long-end yields climbing steadily under the triple pressure of inflation concerns, fiscal expansion, and structural demand contraction, causing government financing costs to surge across major economies.

The US 30-year Treasury yield hit 5.33% this week, the highest level since 2007; French 30-year yields rose to their highest since 2008; German 30-year Bund yields returned to 2011 levels; UK 30-year gilt yields approached 6%; and Japan's 30-year government bond yield climbed to its highest since 1999.

As Wall Street CN reported, the composite yield on global government bonds has returned to 2007 levels. Furthermore, according to data compiled by Bloomberg, the average yield on a benchmark portfolio of investment-grade sovereign bonds has surged to approximately 4.5%, the highest since records began in 2015.

This selloff is not an isolated event in any single market but is driven by global structural forces—ongoing geopolitical turmoil intensifying supply shocks and inflation risks, loosening fiscal discipline among governments, and a systemic contraction in demand from traditional long-end bond buyers. Analysts point out that this means the pricing logic for long-duration fixed income assets is being rewritten; for the Trump administration, elevated financing costs have become a political liability on the eve of the midterm elections.

Treasury Yields Flash Red Across the Curve, Long End Bears the Brunt

The epicenter of this bond market storm is at the long end. Since late June, the US 30-year Treasury yield has risen by nearly 40 basis points, touching 5.33% in intraday trading on Tuesday before easing slightly to 5.28%, yet it remains near two-decade highs.

Long-end bonds are leading the decline because of their heightened sensitivity to risk factors such as inflation. Justin Onuekwusi, Chief Investment Officer at St. James's Place, commented:

"The signal the market is sending is: we expect higher inflation in the future, or at least greater uncertainty, so we are demanding higher yields for holding long-dated bonds."

Bloomberg macro strategist Skylar Montgomery Koning noted a key difference in this structural rise in yields: deficit expansion is occurring against a backdrop where the economy is not showing significant weakness.

"Typically, widening deficits coincide with economic softening, which leads to lower policy rates and provides a buffer for the bond market. However, the current pro-cyclical fiscal expansion means the government is increasing borrowing precisely when rates are already elevated, pushing yields even higher."

Europe and Japan Under Similar Pressure, Financing Costs Hit Multi-Year Highs

European bond markets are equally exposed. French 30-year yields have risen to their highest since 2008, with investors eyeing political uncertainty surrounding the 2027 budget negotiations and next year's presidential election.

According to Bloomberg, people familiar with the matter said Germany issued a 30-year Bund via syndication on Tuesday at the highest interest rate in 15 years.

In Japan, despite absolute yield levels remaining lower than other major markets, the upward momentum in 30-year government bond yields has been equally persistent and robust, reaching the highest level since 1999.

Facing a sharp rise in long-end financing costs, some countries have begun adjusting their bond issuance strategies, shifting toward shorter-dated instruments.

UK authorities have suspended most of their planned long-dated bond issuance program. However, the room for maneuver for governments is extremely limited—in a new environment where it is no longer possible to lock in decades of financing costs at ultra-low rates, the policy options have narrowed considerably.

For the Trump administration, the relentless climb in long-end yields is no longer merely a market issue but a political concern. High government financing costs are transmitting to corporate loans and consumer credit, creating significant pressure ahead of the midterm elections.

Interest payments on US public debt continue to be a core driver of the widening budget deficit. So far this fiscal year, interest expenses have totaled $1.17 trillion, up 15% year-over-year, partly due to higher Treasury yields. The US annual deficit is approaching $2 trillion, and total national debt is nearing the $40 trillion mark.

Chris Iggo, former Chief Investment Officer at AXA IM Core and currently at BNP Paribas Asset Management, said:

"The November elections could bring more policy risk and will keep markets highly focused on fiscal issues ahead of the usual budget season. Ideally, no one wants to face rising mortgage rates on the eve of a major election cycle, even if current rates remain below 2023 levels."

Yardeni Research's strategy team, led by Ed Yardeni, said on Tuesday that there is currently no reason to panic about the US bond market. "We have not pushed the panic button, but we are closely watching whether bond vigilantes will do so."

Dual Supply-Demand Imbalances, Real Yields as the Main Driver

Notably, despite inflation concerns being an important backdrop to this selloff, long-end breakeven inflation rates—the market's implied expectations for future inflation—across most major markets have remained relatively stable overall. The rise in yields has been primarily driven by real yields, i.e., the additional compensation investors demand for holding bonds above inflation.

On the supply side, technology companies issuing large volumes of long-dated bonds to finance AI investments have further intensified supply pressure at the long end. Google parent Alphabet recently decided to issue A$5 billion (approximately $3.6 billion) in bonds in the Australian market for the first time, serving as one example.

On the demand side, traditional long-end bond buyers are systematically exiting. Institutions such as pension funds have historically been a stable source of demand for long-dated bonds, but as defined-benefit pension plans decline and regulatory policies steer more capital toward equities, this demand pillar is weakening. Meanwhile, governments are expanding bond issuance and increasingly relying on price-sensitive private investors to absorb supply.

The Federal Reserve's June meeting minutes show that officials held a dedicated discussion on the changing composition of Treasury holders—shifting from "official sectors relatively insensitive to price" to "private investors more sensitive to price"—a transition that could push term premiums higher. Anshul Pradhan, Head of US Rates Strategy at Barclays, said this shift in buyer composition over the past decade has already added approximately 90 basis points to the term premium on 30-year US Treasuries.

Facing persistently rising yields, institutional investors hold divergent views on the outlook.

Kelsey Berro, portfolio manager at JPMorgan Asset Management, believes the current repricing offers a potentially attractive entry window for new capital. "We see more value at the long end, particularly in real yields," she said.

However, AXA's Iggo takes a more cautious stance:

"It is difficult to determine what level yields need to reach for the total return outlook of long-duration fixed income assets to genuinely improve. The only things that could change the picture are a sudden deterioration in economic data or some kind of external shock—and the latter seems more likely than the former."