Bond bruise won't heal
TLT•The 10-year U.S. Treasury yield topped 5.3% entering October, after its quarterly rise was the largest since 1994. Bond pressure weighed on stocks, while Micron's earnings beat lifted global technology shares.
1. Treasury yields rise
The 10-year U.S. Treasury yield reached a 24-year high and topped 5.3% entering October, despite softer-than-forecast August inflation updates and reduced expectations for another Federal Reserve rate hike this month. By Wednesday's close, the quarterly increase in the yield was the largest since 1994.
2. Global bond pressure
Stocks settled mostly lower Wednesday as bond tensions persisted. In France, the 10-year borrowing premium over Germany rose above 120 basis points for the first time in 14 years. Japanese bonds also saw foreign investors withdraw 4.6 trillion yen ($29.2 billion) in the week through September 26, the largest weekly outflow in six months.
3. Japan rate outlook
The Bank of Japan raised its policy rate to 1.25% last month and signaled further increases. A readout of its September meeting said some policymakers saw a need to accelerate rate rises or bring them closer together; Japan's 10-year government bond yield climbed to 3.12% last week.
