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2025-10-30 15:13:29
[Global Bond Markets Rebound Strongly in October, but High Debt Pressure Remains a Concern] 1. The atmosphere in major global bond markets reversed, with investors flocking back to bond markets in countries like the UK, Germany, and Japan as concerns about high borrowing and persistent inflation subsided, leading to a significant drop in yields. 2. UK government bonds led the rebound. Markets severely impacted earlier this year by fiscal concerns saw both 10-year and 30-year bond yields fall by approximately 30 basis points, potentially marking the largest monthly decline since December 2023. 3. German and French bond yields are expected to record their largest monthly declines since April, when US tariffs boosted safe-haven demand; Japanese 30-year bond yields are also on track for their largest drop since August 2024, benefiting from easing fiscal concerns under new Prime Minister Sanae Takaichi. 4. Inflation and interest rate prospects are favorable for bonds. Lower-than-expected inflation in the UK and US strengthened bets on central bank rate cuts, pushing US 10-year Treasury yields down for the third consecutive month; market experts call this a "perfect combination." 5. Despite easing trade tensions and a partial rebound in yields from their lows, high levels of government borrowing and debt keep the market on edge. While long-term bond supply pressure has eased, structural demand remains weak. 6. Analysts emphasize the need for caution: French budget political risks, the UK's November budget exam, surging German borrowing, and Dutch pension reforms will continue to pressure the European bond market; investors should wait for stable yields before increasing their allocations.
