Bond market turbulence – in which the 10-year Treasury yield hit 5 per cent before plunging – suggests another unpleasant turn is coming for shareholders.
The big fear was that something would break if the US 10-year Treasury yield got above 5 per cent. Turns out the immediate victim was bond yields themselves.
The 10-year yield went as high as 5.02 per cent on Monday night amid chatter that the Bank of Japan could allow bond yields there to move higher. But reaching that 5 per cent mark seemed to act as a sort of siren call for buyers (bond prices move in the opposite direction to yields) who moved in early European trade, which forced yields a little lower.
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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com
