Core Viewpoint - A global government bond sell-off is occurring, pushing the 30-year U.S. Treasury yield towards the critical psychological level of 5% [2][10] Group 1: Bond Market Dynamics - The sell-off has affected bond markets across the Atlantic, with yields rising in the U.S., U.K., Italy, and France [2] - The U.S. 30-year Treasury yield reached 5% for the first time since July, while the 10-year yield climbed to 4.291% [2] - The U.K. 30-year bond yield hit 5.72%, the highest since 1998, while Germany and France's yields reached 3.41% and 4.51%, the highest since 2011 and 2009, respectively [5][10] Group 2: Supply and Demand Factors - A significant influx of corporate bond supply is impacting the market, with predictions of $150 billion to $180 billion in U.S. investment-grade corporate bond issuance this month [10][12] - This issuance is expected to exceed last year's $172.5 billion, marking a near-decade high [12] - The market is experiencing a "never-ending primary market" for various spread products, necessitating investor adjustments to absorb new supply [12] Group 3: Fiscal Concerns - The sell-off reflects deep concerns about the fiscal health of developed economies, exacerbated by pandemic-related spending [14] - Governments are increasingly reliant on bond issuance to finance their deficits, raising investor skepticism [14] Group 4: Seasonal and Technical Factors - September is traditionally a challenging month for long-duration bondholders, with historical data showing a median decline of 2% for bonds over 10 years in this month [16] - Technical liquidity issues are expected, with predictions of nearly $200 billion being withdrawn from the banking system on September 15 due to various fiscal activities [16] Group 5: Market Focus on Employment Data - The market is closely watching the upcoming U.S. employment report, which will influence the Federal Reserve's interest rate decisions [18] - Strong employment data could heighten concerns over prolonged high rates, while weak data may reinforce expectations for rate cuts [18]