Political Turbulence and Data Uncertainty: Undercurrents in the Global Bond Market

⑴ On Tuesday, the yield on Germany's 10-year government bonds, serving as the regional benchmark, fell by about 2 basis points to 2.8218%, as the market was mainly weighed by regional political changes. ⑵ After Japan's Liberal Democratic Party achieved a historic victory in Sunday's election, the market is digesting the possibility of subsequent stimulus measures, which has drawn attention to global capital flows. ⑶ Political tensions in the UK eased on Tuesday, following previous market concerns over criticism of Prime Minister Starmer and the resignation of key aides, which had put pressure on UK assets. ⑷ The yield on the UK's 10-year government bonds, after rising on Monday, turned to fall by nearly 3 basis points on Tuesday, indicating that market sentiment is highly sensitive to political uncertainty. ⑸ With little regional data, the market focus has shifted to the upcoming January employment report, consumer inflation, and retail sales data, which could alter market expectations for interest rate policy. ⑹ Tech giant Alphabet entered the high-grade bond market on Monday, issuing $20 billion in seven-part senior unsecured notes. This wave of massive fundraising led by AI companies has increased supply pressure in the bond market. ⑺ Future trading logic will closely revolve around the development of political events and the performance of key economic data; any unexpected signals of political stability or economic data could trigger a rapid repricing of bond market yields.