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Bond Market News
Treasuries Drop Further Amid Inflation Concerns
July 14, 2026
US Treasury yields continued to move higher by 3-4bp, amid escalating US-Iran tensions and the rally in Brent crude prices to $85/bbl. The 10Y yields rose above the 4.6% handle for the first time since May. US President Donald Trump said that the US will reinstate a naval blockade of Iranian ships in the Strait of Hormuz, while noting that other countries will be able to use the strait. He also demanded a 20% fee on all cargo shipped through the strait, to recover the cost of providing military protection to vessels using the strait. Separately, Fed Governor Christopher Waller said that the FOMC may need to raise rates in the near-term if they get “another hot reading on core inflation”. US headline and core CPI are due later today.
Looking at US equity markets, the S&P and Nasdaq fell by 0.8% and 1.6% respectively. US IG CDS spreads were 0.8bp wider and HY CDS spreads widened by 4.7bp. European equity markets ended broadly flat. European IG CDS spreads were 0.6bp wider, and Crossover spreads widened by 3.8bp. Asian equity markets have opened in the red this morning. Asia ex-Japan CDS spreads were flat. Japan’s Finance Minister Satsuki Katayama called for Japan’s large pension funds, including the GPIF, to increase investment in domestic assets that include JGBs.
New Bonds Pipeline
- Malaysia plans $ sukuk
- ICICI Bank plans up to $500mn bond
- Tata Capital $ 3.5Y bond
Rating Changes
- Fitch Upgrades Banco BPI to ‘A+’/Stable Following CaixaBank’s Upgrade
- Moody’s Ratings downgrades Vestel to Caa3; outlook negative
- Continuum Green Energy Holdings Outlook Revised To Negative; Rating Affirmed; Subsidiary And Proposed Bond Rated ‘BB-‘
Term of the Day: Green Bonds
Green bonds are bonds whose proceeds are used towards financing projects that have a positive environmental impact such as renewable energy. The first green bond was issued by the European Investment Bank in 2007. Since then, the bond markets have seen green bond issues from supranationals such as The World Bank, sovereigns and corporates.
Talking Heads
On Milei’s Aura Fading, Argentina Starting to Look for a Third Way
Steven Levitsky, Harvard University
“Milei is no longer a shoo-in to be reelected. Right now, Peronism is positioned as the most viable alternative.”
Ivan Stambulsky, Barclays
“If a strongly binary scenario starts taking shape, where it’s Milei or Kicillof, that’s bad news for bonds.”
On Europe Risking Explosive Path If It Doesn’t Fix Debts – IMF
“If long-term spending pressures are left unaddressed, debt dynamics could be placed on an explosive path in many European countries. Tinkering at the margin is likely to be insufficient… Fiscal choices will become increasingly constrained, contested, and consequential”
On Indonesia Avoiding S&P Rating Outlook Cut in Win for Prabowo
S&P
“A record of fiscal discipline over multiple administrations underpins Indonesia’s credit profile”
Handy Yunianto, PT Mandiri Sekuritas
“Finally, we got some positive news. Many market participants expected a downgrade or at least an outlook cut to negative.”
Christopher Wong, OCBC
“This is mildly supportive for the rupiah, as it removes an immediate downgrade risk and signals confidence that the recent fiscal and external pressures are temporary and manageable”
Top Gainers and Losers- 14-Jul-26*
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