Tradeweb Government Bond Update – April 2024
April saw a sell-off in global government debt markets, as yields on 10-year benchmark notes increased across the board. The month’s biggest mover was the yield on the U.S. Treasury, which climbed 49 basis points to 4.68% from 4.19% the month prior. The country’s inflation rate rose to 2.7% in March, while its GDP slowed to 1.6% in the first quarter of this year, down from 3.4% in the last quarter.
In neighbouring Canada, the 10-year government bond mid-yield increased by 36 basis points to 3.82% at month-end. Canada’s annual inflation rate ticked up to 2.9% in March from the eight-month low of 2.8% in February. On April 10, the Bank of Canada held its policy rate steady at 5% for the sixth consecutive meeting.
Across the Pacific Ocean, Japan’s benchmark note yield rose by nearly 15 basis points to 0.87%. On April 26, the Bank of Japan maintained interest rates at a range of 0% to 0.1%, after ending its negative rate regime at the previous meeting. The country’s inflation rate for April registered at 1.6%, compared to 2.6% in March. Meanwhile, the Australian 10-year bond yield surged by 48 basis points to 4.45% from March’s 3.98% figure. The Westpac-Melbourne Institute Index of Consumer Sentiment declined 2.4% from 84.4 in March to 82.4 in April.
Over in the United Kingdom, the yield on the 10-year Gilt climbed 43 basis points to end the month at 4.35%. In April, annual shop price inflation slowed to 0.8% from 1.3% cent in March, the lowest rate since December 2021, while the price of non-food items entered deflation at 0.6% in the same month. The GfK Consumer Confidence Index increased by two points to -19, and the S&P Global/CIPS UK Manufacturing PMI dropped to 49.1, having hit a 20-month high of 50.3 in March.
In the Euro area, France’s 10-year bond yield increased by nearly 26 basis points to 3.06%. The country’s inflation rate stood at 2.2% in April compared with 2.3% in March. Greece’s 10-year benchmark note mid-yield ended April at 3.46% from 3.26% the month prior. On April 24, Greece drew EUR 3 billion from the issue of a new 30-year bond, following the upgrade of the country’s credit outlook to “Positive” by Standard & Poor’s five days earlier.
Germany’s 10-year Bund yield closed April 30 basis higher at 2.59%, while its inflation rate rose slightly to 2.4% from 2.3% in March. In the same month, the HCOB German Manufacturing PMI registered at 42.5, remaining firmly within sub-50 contraction territory. In Italy, its government bond mid-yield rose by 23 basis points to 3.89%, with the country’s inflation rate easing to 0.9% in April.
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