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May was a mixed month for global government debt markets, with 10-year bond yields seeing both rises and falls across the board. The main development of the month was the yield on the Japanese benchmark 10-year bond, which rose 20 basis points to 1.05%. The last It was more than 12 years ago, in early April 2012, that average Japanese 10-year yields reached more than 1%. At the same time, the country’s annual inflation rate fell for the second consecutive month, to 2.5% in April, from 2.7% in March.
In contrast, the 10-year Australian government bond yield fell 6 basis points to 4.39% during the month. The Westpac Melbourne Institute’s consumer confidence index fell 0.3 per cent to 82.2 in May, from 82.4 in April.
Across the Pacific, the 10-year US Treasury yield fell 17 basis points to 4.51%. The inflation rate in the United States fell to 3.4% in April, compared to 3.5% in March, the highest figure since September last year. Similarly, in neighboring Canada, the inflation rate also slowed to 2.7% in April from 2.9% the previous month, while the average yield on the country’s 10-year bonds fell by 19 basis points to close the month at 3.63%.
In the UK, the 10-year Gilt yield ended the month at 4.31%, down 5 basis points from the previous month. On May 8, the Bank of England announced it would keep interest rates at 5.25%, while the UK inflation rate fell to 2.3% in April 2024, the most low since July 2021. The GfK consumer confidence index rose to -17 in May. of -19 in April, posting the highest figure since December 2021. The S&P Global/CIPS UK manufacturing PMI also climbed to 51.2 in May from 49.1 in April, marking its highest level since July 2022 .
In the euro zone, the yield on Sweden’s 10-year benchmark bond fell 9 basis points to 2.42%. The country’s inflation rate contracted slightly to 3.9% in April from 4.1% the previous month, marking the lowest figure since January 2022. In Germany, the average Bund yield at 10 closed up 6 basis points in May at 2.65%, while the inflation rate edged up to 2.4%, compared to a three-year low of 2.2% in each of the previous two months. Germany’s HCOB manufacturing PMI was confirmed at 45.4 in May, the highest level in four months.
In France, the inflation rate remained stable at 2.2% in May, as in April, while the yield on 10-year government bonds increased by 6 basis points to reach 3.12%. Its Italian equivalent increased slightly to 3.92% from 3.89% the previous month, while the country’s inflation rate remained unchanged in May at 0.8%.
Editor’s note: The summary bullet points in this article were chosen by the Seeking Alpha editors.
