KTB Advises Gradual Buying of Long-Dated US Bonds as Yields Top 5.25%, Citing Attractive Risk-Reward

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Mr. Poon Panichpibool, a money and capital market strategist at Krungthai GLOBAL MARKETS, Krungthai Bank Public Company Limited, or KTB, recommends that investors gradually buy long-dated US bonds, especially while the 10-year US bond yield is above the 5.25% zone, because the risk-reward of holding them is very attractive and clearly asymmetric. This assessment assumes the bond yield moves up or down by roughly 50 to 100 basis points. The 10-year US bond yield has been fluctuating in a range of 5.22% to 5.35%, tracking volatile crude oil prices amid uncertainty over the situation in the Middle East, before pulling back somewhat after a strong 30-year bond auction, which reflected solid demand for long-dated US bonds. Buy-on-dip flows from market players also helped push yields lower. If investors are concerned about the outlook for long-dated bond yields rising, they may consider gradually investing with each increase of about 25 basis points. In the currency market, the dollar gradually weakened in line with a risk-off mood in US financial markets driven by selling in AI and semiconductor-themed stocks, while market players grew somewhat less worried about the Middle East situation following remarks by President Donald Trump, who has not yet attacked Iran ahead of the midterm elections. The dollar index, DXY, slipped to the 102.1 level from a trading range around 102.0 to 102.5. As for gold, COMEX gold futures for December 2026 delivery rebounded toward the 4,170 dollars per ounce zone amid the risk-off mood in US financial markets over concerns about earnings of AI companies, as well as the pullback in both the dollar and the 10-year US bond yield.

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％United States Government Bond 10Y
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KTB advises buying long-dated US bonds while the 10-year yield tops 5.25%, implying expectations that the yield will fall (bond prices rise) from current elevated levels.