US Treasury yields outshine global peers as worldwide yield spread maps reveal capital migration trends

⑴ The yield on the US 2-year Treasury stands at 4.166%, outpacing the average of major developed countries by over 100 basis points. Only Australia modestly leads with a positive spread of 34 basis points, while the UK follows closely with 17.9 basis points. ⑵ Eurozone countries generally see their 2-year yields inverted relative to the US by 120-180 basis points, with Denmark posting a negative 164 basis points, Sweden negative 178 basis points, and Germany negative 140 basis points. ⑶ Japan’s 2-year yield is only 1.439%, resulting in a negative spread of 272.7 basis points versus the US, the widest gap among all comparable countries, reflecting the ongoing impact of its ultra-loose monetary policy stance. ⑷ For the 10-year maturities, the US yield is reported at 4.577%. Australia again tops the list with a positive spread of 32.6 basis points, while the UK’s positive spread has expanded to 39.2 basis points, indicating that Anglo-Saxon economies are trending toward synchronous interest rate paths. ⑸ Eurozone 10-year spreads have narrowed significantly compared to the 2-year, with France and Italy both around negative 63 basis points and Germany at negative 140 basis points, suggesting more restrained pricing for future ECB rate cuts at the long end. ⑹ Japan’s 10-year yield has risen to 2.715%, but the inverted spread with the US remains at 186 basis points, though notably narrower than the short-term gap of 273 basis points. This highlights the gradual emergence of monetary policy normalisation expectations in Japan’s long-term rates. ⑺ The current spread structure means US dollar assets continue to strongly attract international capital, but historical experience suggests that extreme spread levels often coincide with heightened currency volatility and global asset allocation rebalancing pressures, which must not be overlooked.