Global Bond Rout Continues as France Becomes Ground Zero, Long-End Yields Hit Multi-Year Highs and Markets Rewestern Fiscal Outlooks
The global bond selloff extended on October 1 with long-end yields holding near multi-year highs. The Wall Street Journal labels France as ground zero of the rout, reflecting widening fiscal deficits, political instability, and the prospect of rating outlook downgrades that are forcing investors to reassess Western fiscal sustainability. The U.S. dollar simultaneously approached an eighteen-month high, reinforcing capital flows back into U.S. assets and creating fresh pressure tests for emerging market capital flows.