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The United States 10-year Treasury yield, which is a benchmark for borrowing costs worldwide, consolidated around 3.8%, not far from a 14-year peak of 4% touched in late September, as investors reassessed the outlook of tightening monetary policy, with the Federal Reserve seeking to rein on inflation even as growth slows. Despite some evidence that price pressures are easing and the job market is starting to cool, several Fed policymakers have reaffirmed their support for keeping monetary policy tight for some time. The next crucial catalyst this week will be the nonfarm payrolls report on Friday which will provide a more precise update on the labor market strength and wage pressures.

India 10 Year Government Bond Yield increased to a 15-week high of 7.495%, ahead of a fresh supply of debt via the weekly auction later in the day, while the rise in oil prices and US Treasury yields also weighed on sentiment. Earlier in the week, JP Morgan decided to not include the country's local debt into its emerging market index, citing lengthy investor registration process and the operational readiness required for trading, settlement, and custody of assets onshore. Meanwhile, the RBI lifted its key repo rate by 50bps to 5.9% in its last September meeting, totaling 190bps since the start of its hiking path.

The yield on the Russian 10-year fell sharply to below 10% from the five-month high of 11.6% hit on September 26, as the plunge in Russian equities drove investors to reallocate to safer debt. The military mobilization and escalation threats by the Kremlin triggered a steep sell-off in the MOEX index, raising the likelihood for Russian blue chips to cancel dividend payments and ramping up demand for fixed-income OFZ instruments. Still, the increasingly fragile state of Russian finances continued to weigh on borrowing costs, as bond yields remain well above the average from May to August. Moscow is set to collect over 3 billion RUB throughout the next three years by raising taxes on commodity exports, as lower energy prices and suspension of energy flows to Europe erased Russia's revenue streams. Previously, the Kremlin also approved a decree to allocate half of its $210 billion rainy-day fund for the purchase of OFZ bonds, a move it has never been done in the past.

Brazil’s 10-year government bond yield fell to as low as 11.7%, as investors welcomed the first-round results of the presidential election. President Jair Bolsonaro’s stronger-than-expected results opened the door for a potential win for the right-wing party, providing continuity for investors. On the other hand, the leftist former President Lula da Silva’s slim lead could force him to pivot toward the center and adopt more market-friendly policies. The race will go to a second-round run-off on October 30th. On top of that, Brazil’s improving fundamentals, particularly disinflation and a somewhat better growth outlook, spooked away from safe-haven assets.

The yield on the Chinese 10-year government bond rose to the 2.78% level at the end of September, the highest since late July and tracking the global sell-off of government debt as monetary policy tightening by major central banks increase the opportunity cost to hold Chinese government bonds. Lower government bond prices also tracked the precarious environment in Chinese corporate bonds as real estate giant CIFI missed its debt repayment, pressuring the country’s credit balance as the Chinese government continues to extend stimulus to a property sector fighting a crisis. On the monetary policy front, the PBoC has been providing more stimulus to shore up economic activity following power cuts and Covid lockdowns.

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