US Treasuries rallied significantly in May as investors flocked to safety amidst month long equity declines. But falling yields were not just a US phenomenon. The average 10-year yield for the 23 countries that we track in our Global Macro Dashboard fell from 1.79% a month ago to 1.52% today. Across these 23 countries, over the last month, ten-year yields fell for every country except South Africa and Taiwan. Even though they did not decline, the two countries’ yields also did not rise significantly. South Africa’s ten-year yield only rose 4 bps and Taiwan’s was actually unchanged at 0.83% as a result of less consistent issuance of 10-years. Yields have been consistently falling for most of these countries over the past year, and May’s further declines have brought many of them to new multi-year lows.
Notably, Brazil’s 10-year yield fell the most of the 23 countries in May, falling 80 bps. None of the other countries saw their 10-year yield decline by nearly as much, as the next largest decline was seen by India who’s 10-year yield fell by less than half of that (39 bps). The US 10-year was right on India’s heels as it saw the third largest decline, falling almost 40 bps to 2.1% today. This move has also brought it below the current policy rate of 2.38%. In the charts below we show these three countries’ ten-year yields and policy rates from the first week in May (left) alongside the same chart in this week’s Global Macro Dashboard (right chart); the steep drop in yields has become pretty evident even on a long term chart.