The bond rout takes a bit of a breather

In general, the selloff in the bond market is hitting a bit of a pause with Treasury yields backing down from the highs earlier in the week. Even the BOJ’s efforts earlier managed to see 10-year JGB yields move down from its implicit cap of 0.25% to 0.22%.

2-year Treasury yields are down 3.5 bps on the day to 2.316% while 10-year yields are down 1 bps to 2.39%:

The latter peaked at 2.55% earlier this week so that at least gives you a sense of how things are playing out for now.

That said, while the selloff isn’t intensifying in Treasuries, it isn’t so much so the same case in Europe. Amid the latest inflation figures from Spain and Germany today, bond yields are still moving higher as money markets are pricing in a more aggressive ECB to follow. I’m doubtful about the urgency in which policymakers will take action but market pricing will be what it is.

2-year German bund yields is treading water into positive territory again after yesterday’s push failed to hold: