In July, the government bond market saw some interesting trends around the world. Japan was the only country where yields went up, with the 10-year bond yield ending at 1.06%. The Bank of Japan also raised interest rates to 0.25% and hinted at another hike later in the year. Greece saw a significant drop in its 10-year bond yield, while Italy also experienced a decrease. Italy’s inflation rate rose to 1.3% in July, and consumer confidence went up as well.
In the Euro area, France’s 10-year government bond yield decreased, while Germany saw a slight contraction in its GDP. The UK had a change in leadership, with Keir Starmer becoming the new Prime Minister. The country’s 10-year Gilt mid-yield also dropped in July. In the US, President Joe Biden announced he would not seek re-election, endorsing Vice-President Kamala Harris as the Democratic candidate. The US 10-year Treasury yield fell, and inflation slowed down.
Canada also saw a decrease in its 10-year benchmark note mid-yield, with the Bank of Canada cutting interest rates for the second consecutive month. The country’s inflation rate also went down from the previous month. Overall, the government bond market had some interesting movements in July, reflecting changes in inflation rates, GDP growth, and political developments around the world.
