Dissecting the bond market action - ADMISI

That spike in the government bond yields is a major risk to financial market stability was discussed in yesterday’s Finance show.

Today, we discuss the reasons for the spike in the bond yields and whether it is sustainable.

Marc Ostwald, Strategist at ADM Investor Services International (ADMISI) says the rise in the Treasury yields, especially the 5-year yield is not only due to ‘Trump Bump’, but also due to the liquidation of treasury holdings by China and Gulf nations.

Ostwald also sheds light on the US 2-year US-German yield spread, which is currently hovering at multi-year highs. Again, Ostwald notes that the widening of the spread is not just due to the expectations of expansionary fiscal policies in the US, but also due to the rising political uncertainty across the Eurozone, which is pushing the 2-year German Bund yield to record lows.

Listen to the full segment to know if the spike in the yields is sustainable

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