5 in 5 with ANZ
5 in 5 with ANZ
Thursday: US 10-year hits 16-year high of 4.91%
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Thursday: US 10-year hits 16-year high of 4.91%

10-yr Treasury yield highest since 2007 on cocktail of firm US GDP growth & big bond issuance to fund Govt deficits headed for 10% of GDP; China GDP growth beats forecasts; Brian Martin on a rising R*

US Treasury bonds sold off again overnight, pushing the 10-year yield to 4.91%, its highest level since 2007. Oil rose 2% on a drop in US inventories. Chinese GDP was stronger than expected.

In our bonus deep-dive interview, ANZ’s Head of G3 Economics Brian Martin explains why US Treasury yields are rising, even though the Fed appears to have paused rate hikes.

5 things to know

  1. The 10-Treasury bond yield is at 4.88% at 5am AEST, up 3 bps, but earlier hit a high of 4.91%. Concerns that big US Treasury issues will be needed to fund budget deficits headed for 10% of GDP are a factor in the selloff, Brian says.

  2. Oil prices rose 2% overnight after US oil inventories fell 4.5 million barrels, and on fears the Israel-Hamas war is set to escalate in the Middle East.

  3. China’s annual GDP growth rate of 4.9% in Q3 was better than market forecasts and Q1 to Q3 growth of 5.2% means China is set to achieve its official target of 5% for 2023, says ANZ’s Chief Economist for Greater China Raymond Yeung.

  4. Raymond cites a two-speed economy with strong consumer spending, but weak property investment. He says ANZ may have to further raise its already-upgraded GDP growth forecast of 5.1% for 2023.

  5. He says the GDP result will relieve some of the pressure for China’s authorities to engineer a much bigger stimulus plan.

Cheers

Bernard

PS: Look out tomorrow morning for the latest from Australian jobs figures due later today.

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5 in 5 with ANZ
5 in 5 with ANZ
A daily podcast hosted by Bernard Hickey that gives you the five things you need to know about the global economy and markets in under five minutes. Plus a deep dive into emerging trends and issues featuring ANZ's global team of experts.