Bond

Scott Bessent’s support for 50- and 100-year Treasuries reflects a focus on locking in low borrowing costs amid expectations of stable or rising interest rates.

Treasuries surged yesterday as the trading week got underway, while equities were choppy, as the dollar pulled back, and gold notched its worst day in four years. A busy US data docket awaits today.

Despite plenty of macro volatility in the global economy, the fundamental outlook for Emerging Market sovereigns has stabilised, with credit quality in aggregate starting to improve after a few tough years of major shocks.

Corporate bonds are an effective way to diversify portfolios, offering predictable income through coupon payments, lower risk compared to stocks, and capital preservation, making them attractive for navigating uncertain markets.

India’s Adani Group bonds were under pressure for a second day on Nov 22 following billionaire founder Gautam Adani’s indictment for fraud by US prosecutors and arrest warrants issued for him over an alleged US$265 million (S$357 million) bribery scheme.

Gold and silver could be primed for a recovery as US bond yields show signs of consolidation following their rapid climb. With a quiet economic calendar and fewer Fed rate cuts now priced in, a near-term ceiling on yields may shift momentum in favour of precious metals.

Banks are expected to reduce their issuance in sustainable format next year against the backdrop of overall lower issuance volumes.

Trump’s re-election and a resilient economic outlook for 2025 have pushed sovereign yields higher, with the 10-year Treasury yield testing resistance at 4.4%. Stronger-than-expected growth could keep yields elevated and volatile.

Long-duration Treasury yields, especially the 30-year and 10-year, are rising sharply in response to expectations of inflationary policies under Trump, such as tax cuts and increased spending. This has created a pronounced steepening in the yield curve.