Sleepless bond traders face worst start to a year in decades
BNN Bloomberg
Five-year yields jumped 21 basis points in four days for the steepest new-year increase in almost two decades -- spurring a disruptive rout across assets of all stripes, from high-flying tech stocks to cryptocurrencies.
Like many on Wall Street, Priya Misra was hoping for a quiet start to the year.
Instead, the interest-rate chief at TD Securities was left reeling as a major Treasury selloff rocked global markets, thanks to hawkish signals from the Federal Reserve.
Five-year yields jumped 21 basis points in four days for the steepest new-year increase in almost two decades -- spurring a disruptive rout across assets of all stripes, from high-flying tech stocks to cryptocurrencies.
A broad measure of Treasuries lost some 1.4 per cent this week, extending the annus horribilis for investors in the world’s biggest bond market.
“I’m already a bit sleep deprived -- which I didn’t expect this early in the year,” said Misra, who has to juggle between work and a family life that now includes getting her kids tested for COVID before going to school. “So pandemic concerns are still there. But instead of lower rates and Fed easing, we are grappling with how fast the Fed exits and how high rates can go higher. That can make anyone’s head spin.”
