Week in review
- European Central Bank raise policy rate by 25bps to 2.50%
- China August inflation rose to 0.8% y/y
- Japan final 2Q GDP revised to 0.7% y/y
Week ahead
- U.S. Federal Reserve interest rate decision
- China August economic activity
- Bank of Japan interest rate decision
Thought of the week
U.S. Treasury yields continued to climb higher, with yields on the 10-year near its 2023 highs and the 30-year trading through the 5% handle. Fiscal sustainability concerns, stronger structural growth, and even the crowding out effect from AI debt issuances are all prevailing market narratives. While these dynamics may continue to pressure on yields in the near term, the implication from a total return perspective has been turning more constructive. Total returns on the Bloomberg U.S. Treasury Bellwethers 10-year index were actually flat over the past year, despite the meaningful rise in bond yields. This reflects a higher starting yield which helped cushion negative price returns as well as the lower duration which reduced sensitivity to further yield increases. Together, stronger carry and lower duration have raised the level of breakeven yields to move meaningfully higher before returns turn negative, leaving the setup more balanced than the yield move alone would imply.
U.S. Treasury 10-year and breakeven yields
Bloomberg U.S. Treasury Bellwethers 10-year index
Source: Bloomberg, FactSet, J.P. Morgan Asset Management.
*Breakeven yields are assumed on a 12-month forward basis and are estimated based on index duration and convexity. Data reflect most recently available as of 11/09/2026.
Market data
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All returns in local currency unless stated otherwise.
Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.