US 10-2Y Treasury Yield Spread Moves Closer to -100 Basis Points

The US 10-2 year Treasury yield spread widened again (-95 bps) after the Federal Reserve’s pause in interest rate hikes.

The yield on the 10-year Treasury note edged up from 3.74% to 3.77% while the yield on the 2-year Treasury note rose from 4.60% to 4.72%. Conversely, the 3-month T-bill rate edged down to 5.23%.

Same situation in Europe where the yield on the German 10-year Bund advanced from 2.38% to 2.47%. The 10-2 year spread now stands at -65 bps.

Against this backdrop, investment grade corporate bond indexes were mixed. The IBOXX € Liquid Corporates index dropped by 0.36%, while the IBOXX iShares $ Investment Grade Corporate Bond Index gained 0.68%.

High-yield bond indexes were resilient. In Europe, they witnessed a gain of 0.31% (IBOXX € Liquid High Yield Index), while their US counterparts were up 0.37% (Markit iBoxx USD Liquid High Yield Capped Index).

Lastly, emerging debt denominated in local currencies saw an increase of 0.76%, while the dollar index fell from 103.50 to 102.30.

Get the latest updates from the Fixed Income ETF market with our dedicated league tables: https://www.trackinsight.com/global-etf-survey/2023/industry-data/focus-on-fixed-income-etfs