Swissquote Bank analyst says rising long-term U.S. Treasury yields are intensifying competition for funds
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AT A GLANCE
The analysis says that rising long-term U.S. Treasury yields may intensify competition for funds.
Article
Analysis: Long-term U.S. Treasury yields may continue to rise, intensifying competition for funds
PANews October 1 reported that Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said that rising long-term bond yields are intensifying competition for funds. At current yield levels, some investors are inclined to shift toward safer investments and buy U.S. Treasuries. Ipek Ozkardeskaya noted that, based on an initial yield of approximately 5.3%, the potential return over the next 1 years is asymmetric. Before yields rise to approximately 6.1%, coupon income can cushion losses. If yields rise by 100 basis points, the total loss would be approximately 1.5%; whereas if yields fall by 100 basis points, the return, including coupon income, could approach 13%。
PANews reported that Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said that rising long-term bond yields are intensifying competition for funds.
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At current yield levels, some investors are inclined to shift toward safer investments and buy U.S. Treasuries.
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Based on an initial yield of approximately 5.3%, if yields rise by 100 basis points, the total loss would be approximately 1.5%。
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If yields fall by 100 basis points, the return, including coupon income, could approach 13%。
AI-assisted interpretation
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When bond yields rise, some investors may be more willing to purchase relatively safe investments such as U.S. Treasuries. The article also states that changes in yields may produce asymmetric returns: a rise of 100 basis points would cause an approximate loss of 1.5%; a fall of 100 basis points could result in a return approaching 13%。
Why it matters to readers
This indicates that changes in long-term bond yields may influence investors’ allocation of funds between safe assets and other investments.
Yield can be understood as the level of return that may be earned from holding a bond. Changes in yield affect bond prices and investment returns.
Risks and unknowns
This is an analysis and opinion concerning market impact and does not represent an outcome that will necessarily occur.
The original text did not specify the bond maturity or provide detailed calculations for the assumed yield changes.
The original text did not provide the relevant original research report or real-time yield data.
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Bond Yield
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