The 10Y US Treasury yield hit a new high since 2002! The return of oil prices to $100 sparked global bond sell-off, and 30Y British bonds broke 6% for the first time

The Zhitong Finance App learned that global bonds were once again sold off due to rising oil prices, and the yield on US benchmark treasury bonds rose to the highest level since 2002. On Thursday, 10-year US Treasury yields rose 6 basis points to 5.34%, breaking through the 2007 peak. Earlier this week, 30-year US Treasury yields also hit a 24-year high. At one point, the price of Brent crude oil rose 2.8% to break above $100 per barrel.

Global government debt continues to fluctuate, and the high oil prices associated with the Middle East war are being transmitted to the global economy, driving investors to bet that central banks will raise interest rates further. Large-scale government borrowing, as well as strong investment in artificial intelligence infrastructure, are also boosting capital demand and raising borrowing costs.

“The rise in government bond yields is a structural long-term development,” said Steven Barrow of Standard Bank Advisory. “We see rising yields as a process for financial markets to find their way to this 'new normal'.”

According to an index, global government bonds recorded their worst quarterly performance since 2024. Thursday's sharp drop brought the UK's 30-year Treasury yield to 6% for the first time since 1998. Some analysts and investors say this level could also be seen in the US Treasury bond market.

In France, the 10-year treasury yield jumped 134 basis points to the premium on safer German treasury bonds, the highest since 2012.

Investors will look for clues about the health of the US economy and the Federal Reserve's next steps from Friday's non-farm payrolls data. According to a Bloomberg survey of analysts, the number of non-farm payrolls is expected to increase by 85,000 in September. Prior to the release of the above data, the US will release data on Challenger (Challenger) layoffs, initial jobless claims, and ISM manufacturing data on Thursday.

The schedule of speeches by Federal Reserve officials was equally intense, with a total of six speeches, including Federal Reserve Governor Chris Waller (Chris Waller). Traders expect the Federal Reserve will raise interest rates four more times, 25 basis points each time by the end of 2027 — the world's largest economy will continue to show resilience despite rising borrowing costs.