In the past two weeks, a hot topic in the fixed income space is the yield sell-offs across Western economies. We saw US 10-year Treasury yields going record high, which spilt over to BTP and Gilt markets as well. In this research report, we first give a quick recapitulation of macroeconomic events in the US, the Euro area, and the UK last week.
Then, we explore the factors driving the rise in US Treasury yields, the potential for reversal, and its economic impact. In addition, we analyse the instability in Italy’s BTPs, its fiscal implications, and the effect of higher yields on debt costs. In the UK, we study the spillover effect of US Treasury risk repricing and its potential impact on yield sell-offs and the broader economy.
Read the full report by visiting the link below: