Long-dated government-bond yields hit multi-decade highs across the US, Japan, Germany, and the UK at once on a Middle East oil shock. Plus Europe's growth-down, inflation-up forecast and Bank Indonesia's surprise hike. Three things for the people who allocate long-horizon capital. Full brief: https://universal-asset-owners.ghost.io
Transcript
This is the Universal Asset Owners daily video brief for Monday, May twenty-fifth. US markets are closed for Memorial Day, so today's story is in Asia and Europe. Three things for the people who allocate long-horizon capital.
The long end of the government-bond market set multi-decade highs in four major countries at once. The US thirty-year yield hit five point zero seven percent, the highest since two thousand seven. Japan's thirty-year reached a record. Germany hit a fifteen-year high, the UK a twenty-eight-year high. The trigger was an oil shock; the deeper driver is the term premium rising as debt supply mounts.
The European Commission cut eurozone growth to zero point nine percent for this year and raised inflation to three percent, blaming the energy shock from the Middle East conflict. That's the macro logic under the bond move, in an official document: energy-driven inflation that slows growth while lifting prices.
Bank Indonesia surprised markets with a half-point hike, to five point two five percent — its first increase in two years — to defend a rupiah at a record low. When developed-market yields rise and oil climbs, emerging-market currencies come under pressure, and the response is to raise rates into a slowdown.
Here's the chart. Years since each market last yielded this much: Japan's ten-year, twenty-nine years; the UK thirty-year, twenty-eight; the US thirty-year, about nineteen; Germany's thirty-year, fifteen. The long-end record isn't one market. It's all of them, at once.
For a generation the long bond was the universal owner's shock absorber — it rallied when everything else fell. A world where yields set multi-decade records on an oil shock, while issuance hits records, is a world where that hedge can fire in reverse. The anchor isn't broken. But it's no longer free.
The full brief, the chart, and The Allocator Briefing podcast are at universalassetowners dot com. Back tomorrow.
Continue the briefing. Read the daily brief · watch the daily video briefing · listen to The Allocator Briefing · view the chart of the day.
Produced with the UAO Content Engine. AI-assisted; editorially reviewed before release. Not investment advice.