FX.co ★ Treasury Yields Soar

The yield on the US 10-year Treasury note surged by approximately 7 basis points, reaching 4.29% on Tuesday, marking its highest level since August. This increase occurred as traders returned from an extended weekend, amidst a global bond market sell-off that was instigated by significant liquidation of Japanese government bonds. In Japan, Prime Minister Takaichi plans to dissolve the parliament and announce a snap election, with a key campaign promise focused on implementing tax cuts on food, causing concern among investors about potential further strain on Japan’s fiscal standing. Concurrently, President Trump announced that eight European allies will face progressive tariffs, beginning at 10% on February 1 and scaling up to 25% by June 1, unless a deal is struck permitting the United States to "purchase" Greenland. Additionally, Trump threatened a 200% tariff on French wine and champagne in response to French President Macron's refusal to participate in his "Board of Peace" initiative concerning Gaza. Meanwhile, traders are anticipating a decision from the US Supreme Court later today regarding the legality of significant portions of Trump's trade policies.