High US Treasury yields attract capital inflows as the market focuses on multiple risks

⑴ According to reports, despite a sell-off in US Treasury bonds, investors are actively entering the market to lock in the highest yields in decades, and government bond funds are attracting record inflows.⑵ The overnight market yield range shows the 2-year at between 4.76% and 4.80%, the 5-year at between 4.97% and 5.02%, the 10-year at between 5.18% and 5.24%, and the 30-year at between 5.54% and 5.60%.⑶ The 2-year and 10-year yield spread fluctuated between approximately 41.5 and 44.8 basis points, and the 5-year and 30-year yield spread fluctuated between approximately 56.5 and 58.2 basis points.⑷ Brent crude oil prices are near $92 per barrel, with high energy prices continuing to put pressure on inflation expectations.⑸ In other news, there are reports that Iran is reinforcing nuclear facilities and mobilizing the population in preparation for re-entering conflict.⑹ A Federal Reserve official stated that strong corporate pricing power and a robust economy indicate that interest rates are not yet high enough to contain inflation.⑺ Chip stocks declined as comments sparked concerns about the scale of artificial intelligence investment, leading to significant downturns in related Asian stock indexes.⑻ The high level of options trading activity suggests retail investors’ risk appetite remains strong, with single-stock option contract trading approaching 2021 levels.⑼ The International Monetary Fund warned that major economies will face the largest budget deficits since the pandemic and called for urgent action to rebuild public finances.⑽ European natural gas prices have reached highs seen during periods of Iranian conflict, further intensifying concerns about inflation and energy costs.⑾ Reports indicate that surging US yields have triggered mortgage hedging operations, adding further pressure to the bond market.⑿ Going forward, attention should be paid to statements from Federal Reserve officials, energy price trends, fluctuations in AI-related stocks, and the joint impact of global fiscal conditions on US Treasuries and risk assets.