US 10-year Treasury yield hits highest level since May

Confidence gradually restored in markets, though expectations of higher interest rates, Fed tapering in November persist

Ovunc Kutlu   | 20.10.2021
US 10-year Treasury yield hits highest level since May


The yield on 10-year US Treasury notes climbed on Wednesday to a five-month peak, signaling greater economic confidence after strong corporate earnings.

The yield climbed as much as 1.672% -- the highest level since May 20, when it stood at 1.68%, according to official data.

Ten-year Treasury notes are debt obligations issued by the US government. Their yield can increase with expectations of higher interest rates and as the bond market expects the US Federal Reserve to start tapering in November.

The yield on the notes was under 1% until Jan. 6 this year, as it had plummeted during the coronavirus pandemic amid investor fears and uncertainty on global economic conditions.

Recent increases point to a gradual restoration of investors' confidence in the markets, especially in the US economy, as American companies post strong earnings for the third quarter.

US-based global investment banking majors Goldman Sachs, Morgan Stanley, JPMorgan, Citigroup, and Wells Fargo all announced last week that their net income and revenue increased in July-September from the same period last year.

They were followed on Tuesday by Netflix, which saw its net income climb 83.5% to $1.45 billion in the third quarter and its revenue by 17% to $7.5 billion year-on-year.

Global markets are expected to maintain these positive sentiments as countries continue reopening from the pandemic with climbing vaccination rates.

The S&P 500 and Nasdaq on Tuesday posted their fifth consecutive daily gains.

In Asia, Tokyo's Nikkei 225, the Hong Kong stock exchange, and the blue-chip Asia Dow ended Wednesday in positive territory.

In Europe, all major stock exchanges were up, except for France's CAC 40, as of 1120 GMT.

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