1.74 per cent: Peak yield level touched by 10-year US Treasury last week.
- The spike in US bond yields is beginning to hurt investor sentiment in the Indian equity market. Recently the 10-year US Treasury yield touched 1.74 per cent, the highest in 14 months (it is currently at 1.70 per cent).
- One factor that is pushing up yields in the US is commodity inflation. If bond yield in the US continues to rise, it could have a far-reaching impact.
- Central banks will be forced to reverse their easy monetary policies. Though the US Fed has pledged not to hike rates for some time, it could be forced to revise its view if inflation is very strong.
- Rising yields in the US tend to be negative for emerging markets.
- If foreign portfolio investors can get a high rate of return in a relatively safe asset like US treasury, they may not want to invest in developing market equities, which are deemed to be a much riskier asset class.
A few links for further reading
Insecure and uncertain in insurance business as Covid-18 damage claims mount
Insurance companies around the world were sailing smoothly, helped by growth in emerging markets and strong capitalisation. Things changed in late February when markets realised that Covid-19’s impact on insurers could be significant. Insurers are yet to know the full impact of the crisis as governments and regulators nudge them to give moratoriums to policyholders and quickly settle claims too. India’s insurance regulator has set strict deadlines for medical insurers to settle Covid-19 claims. General insurers face damage claims from businesses devastated by the national lockdown to contain the disease. Is insurance secured to survive, Joydeep Ghosh explains
There was a time when pay cuts we see today were a complete no-no; govt and public sector jobs were considered safe, as pay and pensions were both assured. Not any longer, it seems, writes T N Ninan
Quick approval, grace period
The COVID-19 pandemic has brought home the significance of health and life insurance like nothing else earlier. Even those who were blasé about these covers in the past are now looking to buy a new policy or want to enhance the sum insured on their existing ones. Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has been issuing a slew of guidelines to health/general and life insurance companies aimed at easing matters for customers.