US Treasury bond yields rise in fourth quarter with support for the introduction of "Corona" vaccines

The yield on US 10-year Treasury notes rose significantly in the fourth quarter of 2020, partly reversing the sharp declines seen since the outbreak of the pandemic in the first quarter of the year.

According to the National Bank of Kuwait report, the site (Amazon) received its copy today, Thursday, thanks to the increase in revenues due to improved economic growth prospects, especially after the introduction of vaccines since last December The increase in the amount of bonds offered in light of the need to provide continuous financial support, and perhaps also as a result of high inflation expectations due to the emergence of strong indications of economic recovery.

On the other hand, benchmark bond yields for the European Union and the United Kingdom headed towards a decline, affected by the renewal of restrictions on movement and business activities, which increased the possibility of a double-dip recession and negatively affected Morale.

At the same time, the difference between the yields of the sovereign bonds of the Gulf Cooperation Council countries and those of the US Treasury has narrowed, reflecting the continuous improvement of regional economies (oil prices rose by 26% In the fourth quarter of 2020) after the double shock of the collapse in oil prices and the economic slowdown caused by the pandemic.

The year 2020 was exceptional in terms of regional issuances, as governments sought to finance their budget deficits, which were negatively affected by the repercussions of the recession and the drop in oil prices.

and the value of sovereign issuances of the Gulf Cooperation Council countries denominated in dollars and local currencies reached more than $ 100 billion during the year, roughly in line with the high levels witnessed in the issuance of 2019.

Kuwait's national expectation that regional debt issuances will remain strong in 2021 in light of the continuing budget deficit and the relatively low return.

Global bond yields variation in the fourth quarter of 2020

could explain the variation in the performance of European and US bond yields in the fourth quarter as a result of the marked improvement in the US economic scene, including continued financial support and the introduction of vaccines, despite a slowdown Launching vaccines from what was planned.

On the other hand, Europe faces the risk of a double-dip recession due to the more widespread and stricter lockdown measures compared to the states ...