Volatility Pushes Yields Higher

• Markets stayed defensive, with sentiment weighed down by persistent geopolitical uncertainty linked to Donald Trump and renewed tension around Greenland.
• A renewed “sell America” narrative resurfaced, seeing US bond yields drift higher while the USD weakened, set against a broadly risk-averse global backdrop.
• Moves were most evident at the long end of the US curve, where market volatility pushed the US 10-year Treasury yield up 6bps to 4.29%.
• In Japan, attention turned to fiscal policy after Finance Minister Katayama attempted to calm markets amid speculation of looser fiscal settings, including talk of a two-year suspension of the 8% food and beverage sales tax.
• Japanese government bonds bore the brunt of the move, with 30-year yields hitting a record 3.85% (+26.6bps) and 10-year yields rising to 2.34%, the highest level seen since 1997.