Key facts
- Global bond yields have reached multi-decade highs.
- US 30-year Treasury yields hit their highest level since 2004.
- French and German yields reached their highest levels since 2007-08.
- US weekly jobless claims were near 57-year lows.
- Oracle declared force majeure on an AI data center project due to soaring costs.
Global bond yields surged to multi-decade highs on Thursday, continuing a sell-off driven by accelerating US and European business activity, rising input prices, and signals of further central bank tightening. The US 30-year Treasury yield reached its highest level since 2004, while French and German yields hit levels not seen since 2007-08.
Demand at recent US bond auctions was notably weak, with the 7-year auction described as extremely weak and the 5-year auction seeing the lowest demand in nine years. Analysts suggest investors are hesitant to buy bonds given the prospect of the Federal Reserve restarting rate hikes, ongoing conflict in the Middle East, and a resilient US economy.
In a separate development, Oracle declared force majeure on a major AI data center project, citing soaring costs and potential delays in securing power. The company's shares fell to a seven-week low following the announcement, highlighting broader concerns about the vast debt financing the AI infrastructure buildout.
Meanwhile, US President Donald Trump met with Chinese President Xi Jinping, agreeing to extend a trade truce by two months. However, the meeting yielded little substance on major issues, with the spread between US and Chinese bond yields widening to a record 350 basis points.