US 10-year yields are up 2 basis points on the day to 2.91%, just shy of the daily (and cycle) high of 2.93%. The rise from 1.60% in May has been relentless, despite broad sentiment. Earlier today yields were lower but once again the upward pressure continues.
A break above 3% could send shudders through the broad market. In theory, higher yields make the US more attractive but recent history is showing that no one wants to buy into a bond bust. Past correlations are underlined by a 30-year bull market in bonds. Those days are over so nothing should be taken for granted.
My first inclination is that it’s bad for stocks because it makes dividend yields less attractive. There is even talk rising yields could cause a stock market crash but, then again, that would mean buying into a bond bust. What’s sure is that it will cause volatility and that tends to boost JPY and gold.
US 10 year yields
