Rates, inflation rundown/Company earnings comments/Sentiment

The selloff in US Treasuries yesterday went global as European bond yields rose in sympathy and Asian sovereign bonds got hit hard overnight, particularly in Japan. The 10 yr JGB yield rose 6.5 bps to .87% to the highest since mid November. The 40 yr yield jumped by 9 bps to 2.27%, a level last seen in 2011. These are big moves for the JGB market. 

I'll say again, and sorry to sound hyperbolic, but the unwind of the great sovereign bond bubble that peaked when $18 trillion of negative yielding securities floated around in Europe and Japan continues on. People everyday are debating whether some stocks/AI related are in a bubble but the real bubble, that being in sovereign bonds, was epic and is popping still.   

10 yr JGB Yield

And keep your eye on corporate credit as yields rise here too, though after a ferocious rally. Here is a chart of the yield on the Bloomberg high yield index, it closed last night at the highest level since early January at just under 8%, though spreads remain tight. 

Bloomberg High Yield

Inflation breakevens in the TIPS market yesterday jumped not only because of the CPI report but because commodity prices continued to rise. The CRB Food Stuff index closed yesterday at the highest level since late October. The CRB Raw Industrials index rose .30% yesterday to the highest since September, though still well off its highs. It's up in 11 out of the last 12 days. We remain bullish and long a variety of commodity stocks, including the precious metals, as you likely already know as I've talked about it seemingly forever.