Warning signals are flashing in bond markets across Europe and the US. The dire fiscal position in the UK has seen the 30-year bond yield reach worrying levels, while the French budget/confidence vote looms and has the potential to bring down the Government. French 30-year bond yields also surged, following the UK Gilts and movement up in the US. The US appeals Court halted Trump’s tariff policy and this was immediately reflected in a fall in equities and a spike in the 30-year bond yield. These are worrying times. The US Dollar surged, as the GBP plummeted to 1.3340, while the EUR slumped to 1.1620.
Commodity currencies were not immune to the resurgent safety move to the reserve, with the NZD retracing to 0.5840, while the AUD dipped back below 0.6500. The tariff question now moves to appeal in the Supreme Court, so may be premature, while the economic crises in the UK looks to be gathering pace.
