Yields for 10-year bonds have slipped in almost all of the world's 15 largest economies over the last month as frictions over trade cloud the outlook for growth.
President Donald Trump's announcement that the U.S. would impose tariffs on steel and aluminum imports has sparked tensions with major U.S. trade partners, who have vowed to fight back with their own levies. The European Union, for example, listed some possible products it would target for retaliation.
The Organisation for Economic Co-operation and Development, in its most recent outlook, still sees global economic growth continuing in the next two years, but said "an escalation of trade tensions would be damaging for growth and jobs."
Russia was the only country that saw its 10-year yields rise between Feb. 16 and March 16. All other countries whose annual GDP puts them in the 15 largest economies in the world saw slight declines in their 10-year sovereign debt yields.
Brazil, one of the major U.S. steel suppliers, saw a sharp drop in its 10-year yields over the past month. Brazilian officials raised concerns over the U.S. tariffs, but the decrease may also be due recent downgrades from credit rating agencies, which have cited a stalled pension reform plan as a potential problem.
Officials at the Federal Reserve have also warned about the trade rhetoric but are not expected to update their economic projections just yet.
The Fed's interest rate-setting Federal Open Market Committee will likely conclude its two-day meeting March 21 by raising the benchmark federal funds rate by 25 basis points. The increase, the first under new Fed Chairman Jerome Powell, would put the target range for the federal funds rate at 1.5% to 1.75%.
Fed officials have struck more hawkish tones recently, saying tax cuts could push economic growth higher than expected. This helped drive up yields for 10-year U.S. Treasurys to 2.9% on March 16 from 2.4% at the end of 2017. Yields for 2-year Treasurys also rose to 2.3% on March 16 from 1.9% at the end of 2017, keeping the spread between the two roughly even.
The rise in 10-year Treasurys was more pronounced than other countries' increases. Still, six other countries have seen increases in their 10-year sovereign bond yields since the close of 2017: Canada, Australia, Germany, the United Kingdom, South Korea and India.
Five countries have seen their 10-year sovereign yields falling since the end of 2017: Brazil, Mexico, China, Russia and Spain.
Three countries, meanwhile, have seen their yields remain flat: Japan, France and Italy.