ISMS 15: Top 5 DM Country Interest Rates – Steep US Inversion

Developed Countries - Vast DM Country increases in ST and LT rates, Japan stays an outlier, US looks worst based on yield curve inversionInterest rate overviewUS 3m yield 4.9%, Japan -0.3%, Germany 2.6%, UK 4.1%, France 2.8%US 1yr yield 4.7%, Japan -0.1%, Germany 2.9%, UK 4.0%, France 3.0%US 10yr yield 3.6%, Japan 0.3%, Germany 2.3%, UK 3.5%, France 2.8%Year-on-year changes3m yield in US up the most YoY as it started the interest rate hikeUSA 3m yield was up 4.4ppts, Japan down 0.2ppts, Germany up 3.2ppts, UK up 3.5ppts, France up 3.4ppts1yr yield has risen significantly in developed countries; only Japan’s yield didn’t moveUSA 1yr yield was up 3.1ppts, Japan down 0.1ppts, Germany up 3.3ppts, UK up 2.7ppts, France up 3.5ppts10yr yield grew in all developed countries YOY, even in JapanUSA 10yr yield was up 1.2ppts, Japan up 0.1ppts, Germany up 1.8ppts, UK up 1.9ppts, France up 1.8pptsRate progression3m yield has risen steepest in the USGermany, UK, and France 3m yield follows US, but with a delayJapan remains an outsider and continues with its negative interest rate policy1yr yield in developed countries moved up aggressivelyHowever, in March 2023, US 1yr yield dropped for the first time in 12 monthsOther developed countries also saw a slight fall recently10yr yield has risen in all developed countries, but starts to show flattening behavior recentlySince October 2022, the 10yr yield among the developed countries hasn't moved much and stayed flatYield curve3m yield curve inversion in the US widened after the Fed aggressively increased short-term ratesIn March 2023, the 3m rate was 1.3 ppts higher than the long-term rate1yr yield curve in Japan steepened over the past 12 monthsJapan is among the few countries that haven’t seen a yield curve inversionQuite the opposite is true as the differential between 10yr yield and 3m rates doubled over the past 12 months10yr yield curve in Germany turned into negative territory, but far less severe compared to World10yr yield curve in the UK also saw a slight widening of its yield curve inversion10yr yield curve in France flattened massively and seems likely to invert soonKey pointsAggressive ST rate hikes led by the US and followed by European developed countriesLT rates seem to have peaked and fell MoMJapan with different policy sees almost no movements in both ST and LT ratesUS faced steepest inversion among developed countries; Japan maintains positive yield curve Click here to get the PDF with all charts and graphs Andrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast