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Market Outlook: Bonds and bitcoin hint at bubble territory

Rates have started to sell off, while Bitcoin kicks on to new highs above $51k
Market Outlook: Bonds and bitcoin hint at bubble territory
  • Treasury yields have started to move aggressively higher 
  • Bitcoin hit $50k for the first time and continues to soar 

Yield hikes start to worry

Having banged the inflation drum for some months, last Monday I noted that everyone’s suddenly talking about it. Now rates are really starting to worry. We are witnessing a sharp sell-off in rates with yields moving aggressively higher, which could spread into trouble in other asset classes like stocks, foreign exchange and even cryptos. This creates problems mainly because of just how quickly the move is happening. Treasury yields had their biggest gain in three months on Tuesday, with spread on ten year treasuries rising 9 basis points to hit the highest since February above 1.3 per cent. The 2s10s spread widened to 1.18 per cent, the widest since 2016. Breakevens keep moving higher - inflation expectations are becoming unanchored.

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