Bond yields are surging. What we are watching next

Beansprout Pro in brief

• Bond yields have surged to multi decade highs, with the rise accelerating in September as sticky inflation and further rate hikes challenged expectations that borrowing costs would soon come down.
• The Fed's latest rate hike was unanimous, reinforcing its focus on inflation. But developments outside the US, particularly rising Japanese bond yields, could also become increasingly important for global bond markets.
• Singapore government bond yields have risen much less than US Treasury yields so far, although local yields may not remain insulated if global yields continue to move higher.
• Higher bond yields are also changing the trade offs across asset classes, affecting the relative attractiveness of bonds, equities and gold, as well as the outlook for the US dollar.
• In this article, we look at what is driving the surge in yields, the key signals we are watching for what comes next, and how we are thinking about the implications across different asset classes.