Market Outlook: The Strong Surge in U.S. Treasury Yields is the Key Development of Recent Weeks

According to HSBC Global Research, the strong rise in U.S. Treasury yields and the consequent increase in the dollar have been the most significant developments in recent weeks. Analysts at the bank stated that these movements are driven by "another positive surprise in U.S. activity and indicators of a new rise in U.S. inflation." HSBC noted that all of this has resulted in a sharp repricing of U.S. interest rate expectations ahead of the Fed's December meeting. Long-term U.S. Treasury bonds have been the most affected by this situation. The 10-year U.S. Treasury yield, which reached a recent high of 4.641% on December 26, fell by 5 basis points to 4.531%. The DXY dollar index climbed to 108.835, marking a two-year high.