The U.S. bond market has had little to no success this year, but November has taken a turn for the record.
U.S. debt returns this month were the highest since the 1980s, as investors bid up prices for U.S. Treasuries, agency bonds and mortgage-backed securities (MBS). It ignited strong market gains in everything from stocks to credit to emerging markets. Even cryptocurrencies, speculative and highly risky assets that have struggled when yields soared, have seen big gains.
The rally was a much-needed rally for bond investors, who were bracing for an unprecedented third straight year of declines in the U.S. Treasury market. The Bloomberg U.S. Aggregate Index has returned 4.9% this month as of the 29th. The yield on the US 10-year Treasury note fell by more than 0.65 points to 4.26%.
Whether this rally continues into December and into 2024 will depend on key factors, slowing economic growth and inflation, and whether the Fed continues to show signs of ending interest rate hikes. The US bond market in November received tailwinds from slowing employment growth and a slowdown in the Consumer Price Index (CPI), and dovish comments from US Federal Reserve Chairman Jerome Powell and Fed Director Waller led to market gains. spurred on.
“Recent economic data supports the view that we are in for a Goldilocks-like slowdown,” said Rebecca Patterson, former chief investment strategist at Bridgewater Associates. It’s not overly hindering it.”
The MSCI World Index rose 8.9% this month on signs of a soft landing for the U.S. and global economies and sharp declines in borrowing costs. Emerging market stocks rose 7.4%. The Bloomberg Galaxy Crypto Index, which measures the performance of major digital currencies, rose 18%. In the credit market, U.S. junk bond prices rose more than 4%, the largest increase since July 2022.
“There’s some fear of missing out,” said Ed Alhusseini, interest rate strategist at Columbia Threadneedle Investments. “The 5% 10-year Treasury yield has suddenly become a distant memory.”
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news-rsf-original-reference paywall">Original title:Biggest Blowout in Bonds Since the 1980s Sparks Everything Rally(excerpt)
2023-11-30 03:48:15
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