The yield on the benchmark 10-year Treasury note topped 3.80% (+10 basis points), reaching its highest level since early March. Concurrently, the yield on the 2-year Treasury note surged by 28 basis points, from 4.28% to 4.56%, as the odds of a June pause from the Federal Reserve were ticking lower. Furthermore, the debt ceiling deadline of early June is still looming as Congress takes a break for the Memorial Day weekend.
In Europe, the yield on the German 10-year Bund followed suit, rising from 2.43% to 2.54%.
Investment grade corporate bonds finished the week in the red. In Europe, the IBOXX € Liquid Corporates index slid 0.36%. In the U.S., the IBOXX iShares $ Investment Grade Corporate Bond Index fell for a fourth consecutive week (down 0.73%).
High-yield bonds edged down 0.18% in Europe (IBOXX € Liquid High Yield Index) and 0.25% in the U.S. (Markit iBoxx USD Liquid High Yield Capped Index).
Lastly, emerging debt in local currencies was down 0.36% while the dollar index strengthened again above the 104 threshold.