Macro Notes - May 20, 2025

US bond market looks vulnerable

The yield on 30yr treasury is currently flirting with 5%, threatening to break out to new highs.

Note that inflation breakevens are also +20 bps in the last 30 sessions:

A poor jgb auction has led to spike in long end Japanese government bond yields which are up some 15 bps since yesterday

The Canadian bond market has also collapsed today on the back of a stronger inflation print. Yes the headline number cooled to 1.7%, but the key gauge watched by the BOC, CPI median spike to 3.1% yoy causing a melt up in CGB yields.

Add to that a downgrade of US debt and rising global stock markets and you may have the perfect storm for a push higher in bond yields from here. It will be interesting to see how the 20yr US treasury auction goes tomorrow.

Results out at 1pm, eastern time tomorrow. Good Luck.

Disclaimer

The information provided in this post is for general use only and does not constitute a solicitation for investment. It should not be construed as professional financial advice. Seek independent professional consultation before making an investment decision.