Global Bond Sell-Off Deepens on Strong US Data, Fueling Fed Rate Hike Expectations
| Pair | Now | Since publish |
|---|---|---|
| EURUSD | — | — |
- Global bond sell-off as US yields hit multi-decade highs.
- Strong US economic data fuels Fed rate hike expectations.
- 75% chance of 0.25% Fed hike in October.
Global bond markets experienced a significant sell-off, pushing US Treasury yields to their highest levels in nearly two decades. This movement was primarily driven by robust US economic data, including an unexpected surge in September’s Flash Manufacturing PMI to 57 and Services PMI to 58.7, suggesting the economy remains strong. The strong data, alongside a spike in global crude oil prices and weak demand at a recent debt auction, intensified market expectations for further Federal Reserve interest rate hikes. CME FedWatch data now indicates a 75% probability of a 0.25% rate increase by the Fed in October, with a 55% chance of rates being 0.50% higher by year-end. The renewed tightening fears have rattled global financial markets, contributing to declines in Wall Street futures.