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14 Jan 2015
Bond yields hit record lows across globe on falling inflation expectations
FXStreet (Mumbai) - The government bond yields across the globe have hit record lows as falling energy and commodity prices coupled with weak global growth outlook has raised concerns of outright deflation.
The 30-yr yield in the US is trading near the July 2012 low of 2.443%, while the 10-yr yield fell to 1.852%, its lowest since May 2013. Meanwhile, in Japan, the bond yields hit record lows. The 10-JGB yield fell to a record low of 0.252%. The yield on Swiss five-year bonds has been in negative territory since mid-December, and that on German five-year bonds went below zero earlier this month. Moreover, both Japan, Germany and Switzerland have negative yields all the way out to 5-year bonds.
The yields extended losses today after the World Bank revised its global growth forecasts for 2015 lower to 3% from 3.4% in June. Consequently, the Bloomberg Commodity Index declined to its lowest level since 2002. The index, which tracks 22 industrial commodities, down 26.5% since its peak last April. Copper prices in London fell to a fresh five and a half year lows, while Nickel weakened to Feb 2014 levels. Crude prices are already trading at six year low.
Thus, inflation expectations are inching lower across the globe owing to falling energy and commodity prices and weak global growth forecasts.
The 30-yr yield in the US is trading near the July 2012 low of 2.443%, while the 10-yr yield fell to 1.852%, its lowest since May 2013. Meanwhile, in Japan, the bond yields hit record lows. The 10-JGB yield fell to a record low of 0.252%. The yield on Swiss five-year bonds has been in negative territory since mid-December, and that on German five-year bonds went below zero earlier this month. Moreover, both Japan, Germany and Switzerland have negative yields all the way out to 5-year bonds.
The yields extended losses today after the World Bank revised its global growth forecasts for 2015 lower to 3% from 3.4% in June. Consequently, the Bloomberg Commodity Index declined to its lowest level since 2002. The index, which tracks 22 industrial commodities, down 26.5% since its peak last April. Copper prices in London fell to a fresh five and a half year lows, while Nickel weakened to Feb 2014 levels. Crude prices are already trading at six year low.
Thus, inflation expectations are inching lower across the globe owing to falling energy and commodity prices and weak global growth forecasts.