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2026-09-19 15:10:11
[European Institutions Adjust US Treasury Allocations, Long-Term Pressure Draws Attention] ⑴ The yield on the 10-year US Treasury note recently broke through 5%, reaching its highest level since 2007. ⑵ As the total US federal government debt surpassed $40 trillion in August, some European institutions have begun adjusting their asset allocations, including US Treasuries. ⑶ The pressure facing the US Treasury market has attracted further attention. ⑷ The Norwegian Central Bank Investment Management Company (NZN) has recommended reducing the proportion of government bonds in its benchmark bond investments from 70% to 50%. ⑸ Some institutions estimate that if the adjustments are ultimately implemented, the fund's current holdings of approximately $215 billion in US Treasury bonds could decrease by nearly $80 billion. ⑹ US Treasury bonds will be the single government bond type with the largest reduction in this adjustment. ⑺ Swiss asset management firm Swiscanto released a report stating that the recent breakout of the 30-year US Treasury yield from its previous trading range has led to a reduction in long-term US Treasury bond allocations. ⑻ Brown-Shippy believes that while the US Treasury's expansion of long-term Treasury bond repurchases can temporarily support bond prices, it is unlikely to solve the fundamental fiscal problems in the long run. (9) The institution maintains its underweight recommendation for US Treasuries in the short term. (10) From a market sentiment perspective, the combined effect of overseas allocation adjustments and fiscal supply pressures makes it difficult for the supporting factors for long-term yields to dissipate in the short term. (11) Going forward, attention should be paid to the pace of portfolio adjustments by overseas institutions, the maturity structure of bond issuances, and changes in term premiums.
