00:00Sovereign borrowing rates are surging around the world,
00:02and longer maturity bonds are at the epicentre of investor angst.
00:06Yields on 30-year US Treasuries rose to their highest level since 2007,
00:11while comparable Japanese ones are approaching their all-time high.
00:15And it's a similar picture in Europe, in France, in Germany and in the UK.
00:19Yes, each country does have a specific story,
00:21but the structural trends we're seeing are global in nature.
00:25Bondholders are charging higher prices to hold this debt.
00:29They see geopolitical turmoil,
00:31making economies more vulnerable to supply shocks and persistent inflation.
00:34They're also looking at the impact of record corporate bond issuance,
00:38especially from tech firms looking to finance AI investments.
00:41Then you've got the broader changes to market structures and demographics.
00:44That's seeing waning demand from once steady buyers.
00:47All of this is creating a political headache as governments adjust to a world
00:50where they can no longer lock in borrowing for decades at rock-bottom rates.
00:54Countries are opting for shorter-term debt with lower yields,
00:57but that comes with volatility and other risks.
01:00And it's a particularly sensitive time in the US ahead of the mid-term elections,
01:03with lofty government financing costs feeding through into consumer and corporate loans.
01:08And it's just a particularly immersed in the new states that we're looking to do that.
Comments