What the UK and Japanese bond auctions mean for markets #europe

Interest Rate Drivers - Global interest rates are primarily determined by the balance between saving and investment, not solely by central banks' inflation stabilization efforts [1] - Increased saving tends to push interest rates down, while increased investment pushes them up [1] - Structural forces have shaped interest rates over the past 50 years [1] Factors Influencing Interest Rates - Slowing productivity growth, due to diminishing returns from the ICT revolution, has exerted downward pressure on interest rates over the past 30 years [2] - Demographic shifts, specifically the baby boomers' transition from saving to drawing down on savings during retirement, impact interest rates [2][3] Potential Future Shifts - AI's transformative impact on work and technology could potentially drive interest rates upward in the future [3] - The baby boomers demographic shift could also contribute to rising interest rates [3] Market Focus - The market is closely watching a sell-off in long-dated bonds in developed countries [4] - An upcoming auction of 30-year government bonds in Japan is of particular interest [4]