2023-08-31 18:23:37
The Empire State Building in New York reflected in the SUMMIT One Vanderbilt Observation Deck.
US 10-year bonds are currently down 4.1 percent.
(Photo: Reuters)
Frankfurt A technical term is currently making the rounds again among bond experts: “transatlantic spread”. What is meant is the yield difference between American and German government bonds. It has risen significantly in recent months, especially in the case of long-dated interest-bearing securities.
The 10-year US Treasury yield rose a full percentage point from May to mid-August to a 16-year high of 4.3%. At around 4.1 percent, it is currently barely lower. The yield on ten-year German government bonds fluctuates significantly, but ultimately moves sideways around 2.5 percent.
The result: the transatlantic spread has risen from less than one percentage point to just under 1.6 percentage points. “The expansion is noticeable and is of concern to investors,” says Christoph Rieger, who heads interest rate and credit research at Commerzbank. Read below why the bond markets in the US and Germany are developing so differently and what that means for investors.
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