Deutsche Bank CEO: The global bond sell-off is not just a "temporary fluctuation," and yields will remain at high levels
Deutsche Bank AG CEO Christian Sewing stated that bond yields are expected to remain high in the coming months as governments around the world strive to implement reforms and adhere to fiscal discipline
According to the Zhitong Finance APP, Christian Sewing, CEO of Deutsche Bank AG, stated that bond yields are expected to remain high in the coming months as governments around the world strive to implement reforms and adhere to fiscal discipline. Sewing said, "I don't think this is just a temporary fluctuation. It reflects, to some extent, political uncertainty, a lack of reforms, and the continuous rise of debt."
On Tuesday, in the UK, the 30-year bond yield soared to its highest level since 1998, while U.S. bond yields also approached the closely watched 5% mark. The 30-year yields in Germany and the Netherlands rose to 3.4% and 3.57%, respectively, the highest levels since 2011; the 30-year yield in France was reported at 4.49%, the highest level since 2009. Japan's 30-year government bond yield, after reaching a new high not seen since at least 2006 last week, has recently retreated to 3.206%.
The turmoil in the global bond market stems from multiple overlapping factors. The global government bond market is facing selling pressure as concerns over inflation, debt issuance, and fiscal discipline have weakened confidence in what were previously considered the safest assets in the world. Significant increases in German government spending and the implementation of tax cuts for the wealthy in the U.S. have exacerbated market worries about the scale of government borrowing. Since French Prime Minister Francois Bayrou initiated a confidence vote to try to break the deadlock over budget cuts, France has fallen into a severe political crisis. Political instability in the UK and Japan has further raised investor doubts about whether governments have the capacity to address debt issues.
Sewing stated that although yields may remain high, he does not believe that the current sell-off will further intensify or trigger broader market turmoil. He said, "Of course, risk sensitivity has changed. And all our discussions about central bank independence cannot quell the emotions in the capital markets."
