The yield of the 2-year US bond exceeds 2% for the first time since Lehman
The last time investors could see the yield of the US two-year bond above 2% was September 30, 2008, just two weeks after the bankruptcy of Lehman Brothers (September 15).
In this movement, the inflation data known today in the world’s leading power would also have had a lot to do with it. The Consumer Price Index (CPI) grew by 0.1% in December and left total inflation for 2017 at 2.1%, the Labor Department reported today. The figure coincides with the forecasts of analysts and puts inflation around the annual target of 2% marked by the Federal Reserve (Fed), which is expected to keep the pace of rate increases at full gas this same year.
After knowing the figure, the price of US Treasury bonds at all maturities fell sharply, and according to data compiled by Bloomberg, the differential between the return on maturities at 5 and 30 years has narrowed significantly, approaching its lowest level also since 2007.
The tension that the US debt market has experienced in the last week, also stirred by the rumors (later denied) that China would turn the tap on the debt purchases of the country, as well as the words of Bill Gross, king of the rent fixed, warning of the end of cycle in the market, has also moved to the European debt markets.
In its daily blog, the analysts of Unicorp Patrimonio indicate that yesterday, the reading of the minutes of the last meeting of the ECB again generated strong volatility in the fixed income markets. “A phrase generated strong sales in the European debt, especially the German one: the language to refer to the different elements of the monetary policy could be revised soon this year”. Investors began to discount that the asset repurchase program may end (remember that this month it drops from 60,000 to 30,000 million euros per month).