A Global Snapshot Of Government Bond Yields
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View from the Observation Deck  
  1. Today's blog post shows the yields on a couple of benchmark government bond maturities from key countries/economies around the globe.
  2. While bond yields still remain near their historic lows, they have been rising in 2021, particularly with respect to 10-year government bonds (see YTD Change in table).   
  3. The yield on the U.S. 10-year Treasury note (T-note) stood at 1.57% at the close on 5/5/21, 442 basis points below its historical average yield of 5.99% since 1/5/62 (not in table), according to Bloomberg.
  4. The yield spread between the U.S. 2-year T-note and the 10-year T-note was 142 basis points on 5/5/21, well above its 30-year average spread of 118 basis points, according to Bloomberg. Remember not that long ago when economists were concerned about an inverted Treasury yield curve?  That is a scenario where short-term yields exceed those offered by bonds with intermediate and long maturities. 
  5. The increase in the yield on the 10-year T-Note in Q1'21 (82 basis points) was the sharpest since late 2016, according to Reuters.
  6. Investors continue to funnel huge amounts of capital into bond mutual funds and exchange-traded funds despite the rise in bond yields. Taxable and Municipal bond mutual funds and ETFs reported estimated net inflows totaling a combined $55.71 billion in March 2021, according to Morningstar. That figure stood at $893.63 billion for the 12-month period ended 3/31/21. 
This chart is for illustrative purposes only and not indicative of any actual investment. 

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Posted on Thursday, May 6, 2021 @ 1:23 PM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.