Key Points
The eye-watering surge in long-term U.S. government borrowing costs continues to pummel world markets everywhere as investors fear 30-year yields above 5% are bound to sow financial distress somewhere in the system...
With U.S. Congress again riven by the overnight ouster of the House speaker and Federal Reserve officials teeing up yet another interest rate hike amid persistently tight jobs market readings, bond yields are spiralling ever higher...
And then throw in the resulting rampant dollar and the Bank of Japan's looming battle to hold up the yen , which intensifies speculation it may sell dollar reserves and Treasuries at the margin or move quicker to tighten its own monetary policy...
With exchange traded funds capturing the full gamut of Treasuries now down 4.3% for the year to date - and U.S. government debt clocking a third straight year of annual losses for the first time in over two centuries - wider credit markets have started to murmur too...
The gloomy rates picture is starting to floor stocks too - with a growing feeling that dysfunction in Washington and a Fed seemingly intent on tightening until something breaks all spells a rough end to the year just as another earnings season unfolds...
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