Bonds and Treasury Yields: How They Are Related

In this article, we will show the simple relationship between bonds and treasury yields.

Bonds are debt instruments that are used by governments and companies to borrow money from investors at cheap rates. Instead of borrowing from lending institutions at exorbitant rates and under conditions of repayment which may be too stringent for the borrower, it may be more convenient for the borrower to approach investors through the bond market.

Best Bond Brokers

  1. rating empty
    rating full

    IC Markets provide trading opportunities across nine bonds, known for their deep liquidity and competitive pricing. The broker distinguishes itself by offering leverage as high as 1:200. Additionally, clients have access to top-tier charting platforms, MT4 and MT5.

    Instruments Regulator Platforms
    CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto ASIC, CySEC, FSA, CMA MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower
    Min. Deposit Min. Trade Leverage
    $200 0.01 Lots 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
  2. rating empty
    rating full

    IG consistently ranks in the top 5 for its versatile bond offerings. Traders have the opportunity to invest in global bond futures and ETFs through CFDs, share dealing, or spread betting, all with competitive spreads starting from just 1 point. For those more serious about trading, correlated interest rate products are available, alongside extra investment perks like dividend coupons.

    Instruments Regulator Platforms
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime
    Min. Deposit Min. Trade Leverage
    $0 0.01 Lots 1:30 (Retail), 1:222 (Pro)
  3. rating empty
    rating full

    IC Trading provides nine bonds, featuring long or short positions via CFDs, with leverage up to 1:200. Traders can access government bonds across major regions such as the United States, Japan, and Europe.

    Instruments Regulator Platforms
    CFDs, Forex, Stocks, Indices, Commodities, Bonds, Cryptos, Futures FSC MT4, MT5, cTrader, AutoChartist, TradingCentral
    Min. Deposit Min. Trade Leverage
    $200 0.01 Lots 1:500
  4. rating empty
    rating full

    At eToro, you can trade bonds by investing in ETFs and using the YieldGrowth Smart Portfolio. These platforms are user-friendly and provide the benefits of fixed-income products with ease of access.

    Instruments Regulator Platforms
    CFDs, Forex, Stocks, Indices, ETFs, Smart Portfolios, Commodities, Futures, Crypto, NFTs FCA, ASIC, CySEC, FSA, FSRA, MFSA, CNMV, AMF eToro Web, CopyTrader, TradingCentral
    Min. Deposit Min. Trade Leverage
    $50 $10 1:30
  5. rating empty
    rating full

    Trade Nation provides a selection of well-known bond futures through its exclusive TN Trader platform. With a leverage ratio of 1:5, low fixed spreads, and no required minimum deposit, Trade Nation is an excellent choice for novice traders keen to enter the bond market with ease. The platform also features robust analysis tools, such as a signal centre, to identify market opportunities effectively.

    Instruments Regulator Platforms
    Forex, CFDs, Indices, Shares, Commodities, Futures, Bonds, Spread Betting, Cryptos (Bahamas Entity Only) FCA, ASIC, FSCA, SCB, FSA MT4
    Min. Deposit Min. Trade Leverage
    $0 0.1 Lots 1:500 (entity dependent)
  6. rating empty
    rating full

    Accessible on both MT4 and MT5 platforms, Vantage's bond offerings span various government and corporate markets. Traders can engage with just 1 lot and speculate on fluctuating prices. A comprehensive selection of educational resources and market analysis tools is also available for those aiming to enhance their short-term trading strategies.

    Instruments Regulator Platforms
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Spread betting FCA, ASIC, FSCA, VFSC ProTrader, MT4, MT5, TradingView, DupliTrade
    Min. Deposit Min. Trade Leverage
    $50 0.01 Lots 1:30
  7. rating empty
    rating full

    City Index is a leading option for bond CFD traders due to its commission-free model and attractive spreads starting at 0.02 points. A rich array of bond market news and analysis, like the Trading Central dashboard, is available. Traders of all levels can start without a minimum deposit or explore bonds risk-free with a 12-week demo.

    Instruments Regulator Platforms
    CFDs, Forex, Stocks, Indices, Commodities, Crypto, Futures, Options, Bonds, Interest Rates,ETFs,Spread Betting FCA, ASIC, CySEC, MAS Web Trader, MT4, TradingView, TradingCentral
    Min. Deposit Min. Trade Leverage
    $0 0.01 Lots 1:30

Safety Comparison

Compare how safe the Bonds and Treasury Yields: How They Are Related are and what features they offer to protect traders.

Safety Comparison
Broker Trust Rating FCA Regulated Negative Balance Protection Guaranteed Stop Loss Segregated Accounts
IC Markets 4.6
IG Index 4.9
IC Trading 2.8
eToro 4.5
Trade Nation 4.3
Vantage FX 4.6
City Index 4.2

Payments Comparison

Compare which popular payment methods the Bonds and Treasury Yields: How They Are Related support and whether they have trading accounts denominated in British Pounds (GBP).

Payments Comparison
Broker GBP Account Debit Card Credit Card Neteller Skrill Apple Pay
IC Markets
IG Index
IC Trading
eToro
Trade Nation
Vantage FX
City Index

Mobile Trading Comparison

How good are the Bonds and Treasury Yields: How They Are Related at mobile trading using apps or other mobile interfaces.

Mobile Trading Comparison
Broker Mobile Apps iOS Rating Android Rating Smart Watch App
IC Markets iOS & Android 3.1 4.2
IG Index iOS & Android 4.6 4
IC Trading iOS & Android 4.8 4.6
eToro iOS & Android 4 3.8
Trade Nation iOS & Android 4.1 3.5
Vantage FX iOS & Android 3.6 3.9
City Index iOS & Android 3.8 3.1

Beginners Comparison

Are the Bonds and Treasury Yields: How They Are Related good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?

Beginners Comparison
Broker Demo Account Minimum Deposit Minimum Trade Support Rating Education Rating
IC Markets $200 0.01 Lots 4.5 3.5
IG Index $0 0.01 Lots 4.5 5
IC Trading $200 0.01 Lots 2.8 2.2
eToro $50 $10 2.5 4
Trade Nation $0 0.1 Lots 4.5 3.8
Vantage FX $50 0.01 Lots 4.4 4
City Index $0 0.01 Lots 4 4.3

Advanced Trading Comparison

Do the Bonds and Treasury Yields: How They Are Related offer features that allow for more advanced trading strategies?

Advanced Trading Comparison
Broker Automated Trading Pro Account Leverage VPS AI Low Latency Extended Hours
IC Markets Expert Advisors (EAs) on MetaTrader, cBots on cTrader, Myfxbook AutoTrade 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
IG Index Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime 1:30 (Retail), 1:222 (Pro)
IC Trading Expert Advisors (EAs) on MetaTrader, cBots on cTrader 1:500
eToro Automate your trades via CopyTrader - follow profitable traders. Open and close trades automatically when they do. 1:30
Trade Nation Expert Advisors (EAs) on MetaTrader 1:500 (entity dependent)
Vantage FX Myfxbook AutoTrade, Expert Advisors (EAs) on MetaTrader 1:30
City Index Expert Advisors (EAs) on MetaTrader 1:30

Detailed Rating Comparison

Use this heatmap to compare our detailed ratings for all of the Bonds and Treasury Yields: How They Are Related.

Detailed Rating Comparison
Broker Trust Platforms Mobile Assets Fees Accounts Support Research Education
IC Markets 4.6 4 3.7 3.5 4.6 4 4.5 4 3.5
IG Index 4.9 4.9 4.3 4.5 3.5 4 4.5 4.9 5
IC Trading 2.8 4 4.7 3 4 3.5 2.8 3 2.2
eToro 4.5 2.8 3.9 3.8 3.4 4.1 2.5 4.3 4
Trade Nation 4.3 4.3 3.8 3.5 4.5 4.5 4.5 3.8 3.8
Vantage FX 4.6 4.3 3.8 4.5 4.4 4.5 4.4 4 4
City Index 4.2 4 3.5 4.5 3.8 3.8 4 4.3 4.3

Our Take On IC Markets

"IC Markets provides excellent pricing, swift execution, and easy deposits. With cutting-edge charting tools like TradingView and the Raw Trader Plus account, it continues to be a preferred option for intermediate and advanced traders."

Pros

  • As a well-regulated and reputable broker, IC Markets focuses on client safety and transparency to provide a dependable global trading experience.
  • IC Markets provides some of the industry's narrowest spreads, offering 0.0-pip spreads on major currency pairs. This makes it an extremely cost-effective choice for traders.
  • Access over 2,250 CFDs across diverse markets like forex, commodities, indices, shares, bonds, and cryptocurrencies. This variety enables traders to employ diversified strategies.

Cons

  • Although there are four top-tier third-party platforms available, the absence of in-house software or a trading app tailored for novice traders is notable.
  • IC Markets provides metals and cryptocurrencies for trading through CFDs, though the selection is narrower compared to brokers such as eToro. This limits opportunities for traders focused on these asset classes.
  • Certain withdrawal methods incur fees, including a $20 charge for wire transfers. These costs can reduce profits, particularly with frequent withdrawals.

Our Take On IG Index

"IG offers a complete package with an intuitive online platform, top-tier beginner education, advanced charting tools through its TradingView integration, real-time data, and swift execution for seasoned traders."

Pros

  • IG stands out with its extensive range of instruments, offering stocks, forex, indices, commodities, and cryptocurrencies. Additionally, it has recently introduced US-listed futures and options, along with an AI Index. These options enhance opportunities for diversification in trading.
  • The IG app provides an excellent mobile trading experience with an intuitive design, earning it the Runner Up position in our 'Best Trading App' award.
  • As a seasoned broker, IG adheres to stringent regulatory standards across various regions, ensuring significant trust.

Cons

  • Based on tests, stock and CFD spreads remain less competitive than the lowest-cost brokers, such as CMC Markets.
  • Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
  • IG imposes a monthly inactivity fee of $12 after two years, discouraging occasional traders.

Our Take On IC Trading

"IC Trading offers an ideal environment, featuring top-tier execution speeds of around 40 milliseconds, extensive liquidity, and advanced charting tools, perfect for scalpers, traders, and algorithmic traders."
Christian Harris
Christian Harris
Reviewer

Pros

  • Trading Central and Autochartist provide valuable technical analysis and actionable ideas. These tools are readily available within the account area or on the cTrader platform.
  • The streamlined digital account setup allows traders to commence trading swiftly, eliminating lengthy paperwork. Testing shows the process takes mere minutes.
  • IC Trading provides exceptional flexibility, allowing traders to open as many as 10 live accounts and 20 demo accounts. This enables the management of distinct profiles for various activities, including manual and algorithmic trading.

Cons

  • The educational materials require significant enhancement unless accessed via the IC Markets website. This limitation is particularly disadvantageous for beginners seeking a thorough learning experience, especially when compared to industry leaders such as eToro.
  • Although IC Trading operates under the reputable IC Markets group, it is licensed by the FSC in Mauritius, a regulator known for its limited financial transparency and lack of robust safeguards.
  • Unlike IC Markets, IC Trading lacks support for social trading via the IC Social app or the ZuluTrade platform.

Our Take On eToro

"eToro's social trading platform excels with its outstanding user experience and lively community chat, aiding beginners in spotting opportunities. It offers competitive fees on numerous CFDs and real stocks, alongside exceptional rewards for seasoned strategists."

Pros

  • The web platform and mobile app receive higher user reviews and app rankings compared to leading competitors like AvaTrade.
  • eToro secured second place in DayTrading.com's 'Best Crypto Broker' for 2025, offering a vast selection of tokens, dependable service, and competitive fees.
  • The broker offers excellent services for beginners, featuring commission-free stock trading, a low minimum deposit, and an unlimited demo account.

Cons

  • The absence of extra charting platforms such as MT4 may deter experienced traders who rely on external software.
  • The minimum withdrawal is set at $30, accompanied by a $5 fee. This may impact traders with limited funds, particularly those just starting out.
  • There are no assured stop-loss orders, which could be a valuable risk management tool for novice traders.

Our Take On Trade Nation

"Trade Nation is ideal for novice traders seeking diverse markets on an easy-to-use platform. It offers no minimum deposit, complimentary funding options, and robust educational resources."

Pros

  • Beginners benefit from a modest initial deposit.
  • A variety of trading platforms and apps, such as MT4, make the brand suitable for experienced traders.
  • Global traders can use accounts in various currencies.

Cons

  • Reduced legal safeguards with an offshore entity.

Our Take On Vantage FX

"Vantage is an ideal choice for CFD traders looking for a well-regulated broker with access to the dependable MetaTrader platforms. With a swift sign-up process and a minimum deposit of $50, starting trading is simple and fast."

Pros

  • The broker recently expanded its range of CFDs, offering more trading opportunities.
  • Vantage has enhanced its trading tools for experienced traders, introducing AutoFibo EA to pinpoint potential market reversals.
  • The trading software suite is outstanding, featuring the acclaimed MT4 and MT5 platforms.

Cons

  • It's unfortunate that some clients must register with the offshore firm, which provides reduced regulatory safeguards.
  • Based on tests, average execution speeds of 100ms to 250ms are slower compared to other options.
  • To access optimal trading conditions, a substantial deposit of $10,000 is required. This includes a commission of $1.50 per transaction per side.

Our Take On City Index

"City Index suits active traders perfectly, offering rapid execution speeds averaging 20ms and a customisable web platform with over 90 technical indicators. Its educational resources are exceptional. For UK traders interested in spread betting on 8,500+ instruments tax-free, City Index is an excellent option."

Pros

  • City Index offers access to over 13,500 markets, including forex, indices, shares, commodities, bonds, ETFs, and interest rates. The platform's inclusion of niche markets such as interest rates provides traders with unique opportunities not commonly available on other platforms.
  • City Index offers adaptable trading platforms suited to every expertise level. For newcomers, the Web Trader platform is straightforward and user-friendly. For more in-depth analysis and automated features, MetaTrader 4 (MT4) and TradingView are supported, providing a comprehensive trading experience for all traders.
  • City Index is under the regulation of leading authorities, such as the FCA in the UK, ASIC in Australia, and MAS in Singapore. Its parent company, StoneX Group Inc., is publicly listed, which enhances its credibility.

Cons

  • Unlike brokers like AvaTrade and BlackBull, City Index lacks options for passive trading, such as social copy trading or real ownership of stocks and ETFs. This limitation may reduce its appeal to traders seeking a more hands-off approach.
  • City Index does not offer an Islamic account with swap-free conditions, making it less attractive to Muslim traders than brokers such as Eightcap and Pepperstone.
  • Although many brokers, such as eToro, have broadened their crypto offerings, City Index restricts its clients to crypto CFDs. This limited selection may not meet the needs of traders seeking a wider variety of altcoins.

Bonds are known by several names in several countries. In the US, Nigeria and some other countries, they are known as Treasury bills and Treasury Notes.

Treasury yields refer to the percentage interest rate that a bond investor can expect to earn for his bond investments. In other words, the treasury yield is the payment on a bond. Treasury yields can fluctuate on the market, even though when an investor buys a bond, the payable rate at which the negotiation is settled on will not change until the bond matures.

Different countries have different yields on their bonds. In addition to the present yield, it is important for investors to know what the annual yield changes have been, and the day to day and month to month changes in the yield rates have also been. This information can make the difference between making money on a bond investment, and buying a bond which will eventually get blown off by falling yields or falling prices as a result of inflationary pressures.

Below is a table showing the treasury yields of different countries.

Country

Current

Last Week

Weekly Chg

Last Month

Monthly Chg

Last Year

Yearly Chg

Greece

16.78

17.67

-0.89

20.18

-3.40

24.34

-7.56

Pakistan

11.45

11.55

-0.10

11.60

-0.15

12.07

-0.62

Kenya

11.00

11.00

0.00

10.00

1.00

0.00

Vietnam

10.19

10.13

0.06

9.96

0.23

0.00

Brazil

9.45

9.47

-0.02

9.97

-0.52

12.55

-3.10

India

8.13

8.15

-0.02

8.17

-0.04

8.81

-0.68

Turkey

8.07

8.13

-0.06

8.31

-0.24

0.00

Portugal

7.57

8.02

-0.45

8.61

-1.04

12.38

-4.81

Russia

7.33

7.41

-0.08

7.76

-0.43

6.00

1.33

Romania

6.90

6.90

0.00

6.80

0.10

0.00

Iceland

6.90

6.95

-0.05

6.96

-0.06

0.00

Peru

6.76

6.76

0.00

6.76

0.00

6.76

0.00

Hungary

6.72

6.61

0.11

7.37

-0.65

7.78

-1.06

South Africa

6.62

6.75

-0.13

6.61

0.01

8.20

-1.58

Colombia

6.07

6.03

0.04

6.45

-0.38

7.62

-1.55

Indonesia

5.72

5.83

-0.11

5.98

-0.26

6.37

-0.65

Slovenia

5.51

6.00

-0.49

6.44

-0.93

0.00

Croatia

5.42

5.42

0.00

5.47

-0.05

0.00

Mexico

5.41

5.36

0.05

5.31

0.10

6.30

-0.89

Chile

5.39

5.40

-0.01

5.42

-0.03

0.00

Spain

5.39

5.79

-0.40

5.76

-0.37

5.55

-0.16

Philippines

5.17

5.08

0.09

4.86

0.31

0.00

Ireland

4.88

4.86

0.02

5.02

-0.14

8.21

-3.33

Italy

4.79

4.93

-0.14

5.12

-0.33

5.95

-1.16

Poland

4.48

4.60

-0.12

4.92

-0.44

5.81

-1.33

Israel

4.07

4.10

-0.03

4.28

-0.21

4.71

-0.64

China

3.50

3.48

0.02

3.52

-0.02

3.73

-0.23

Thailand

3.49

3.61

-0.12

3.83

-0.34

3.39

0.10

New Zealand

3.48

3.48

0.00

3.48

0.00

4.63

-1.15

Malaysia

3.46

3.48

-0.02

3.48

-0.02

3.74

-0.28

Bulgaria

3.30

3.40

-0.10

3.85

-0.55

0.00

Australia

3.13

3.17

-0.04

3.26

-0.13

4.50

-1.37

South Korea

3.02

2.95

0.07

3.06

-0.04

3.94

-0.92

Qatar

2.77

2.79

-0.02

3.03

-0.26

0.00

Belgium

2.43

2.41

0.02

2.65

-0.22

4.46

-2.03

Czech Republic

2.30

2.28

0.02

2.49

-0.19

3.25

-0.95

France

2.22

2.10

0.12

2.28

-0.06

3.32

-1.10

Norway

2.11

1.98

0.13

2.25

-0.14

2.53

-0.42

Austria

2.05

2.01

0.04

2.06

-0.01

3.09

-1.04

United Kingdom

1.88

1.83

0.05

1.84

0.04

2.56

-0.68

Finland

1.85

1.80

0.05

1.89

-0.04

2.62

-0.77

Canada

1.84

1.82

0.02

1.85

-0.01

2.37

-0.53

Netherlands

1.80

1.78

0.02

1.85

-0.05

2.57

-0.77

United States

1.77

1.72

0.05

1.75

0.02

2.23

-0.46

Sweden

1.66

1.56

0.10

1.56

0.10

1.95

-0.29

Germany

1.64

1.55

0.09

1.58

0.06

2.12

-0.48

Denmark

1.62

1.56

0.06

1.68

-0.06

2.32

-0.70

Singapore

1.33

1.32

0.01

1.48

-0.15

1.72

-0.39

Taiwan

1.17

1.15

0.02

1.18

-0.01

0.00

Japan

0.79

0.76

0.03

0.80

-0.01

1.03

-0.24

Hong Kong

0.78

0.78

0.00

0.81

-0.03

1.39

-0.61

Switzerland

0.55

0.52

0.03

0.61

-0.06

1.05

-0.50

 

(Source: © 2012 Trading Economics)

The data clearly shows the following information:

a)     Treasury yields are not steady, even though the interest rates that bond investors earn on their investments usually do not change.

b)     The higher yields are seen with countries where the risk of default is higher. This explains why Greece occupies the number one position on this list.

c)     Another factor to look at is the rate of annual change in the treasury yield of a government bond. If we look at this list, we can see that the greatest swings are seen in countries with sovereign debt crises. So Greece, Portugal, Ireland and Brazil are tops in terms of changes in the yields.

Using this information, we can conveniently identify the factors that affect yield rates:

a)     Inflation

What does inflation do to bond prices and yield rates? If the inflation rate exceeds the treasury yields that a bond is expected to pay the investor, the obvious effect is that the earnings from the bond will be worth less in future than it would have been. In order to militate against inflation risk, traders should avoid holding bonds for a very long time. With the global uncertainty in the financial markets that have been experienced for some years now, it really makes no sense holding a 30 year bond in this day and age.

b)     Credit rating

Credit ratings are used to judge the ability of a bond issuer to pay back. If credit ratings of a bond issuer are low or are cut from higher levels, the treasury yields will have to be increased as an incentive for investors to take a chance on that bond. If ratings improve or the bond issuer is able to access finance to enable it settle its obligations, the treasury yield will fall. This explains why Greece’s bond yields were as high as 24% last year, but has fallen to about 16% as it has accessed bailout money from the ECB and other lenders.

c)     Interest rates

If interest rates are increased to a point where it exceeds a bond holder’s yields, investors will flock more to the bond with higher rates and the value of the present bond will drop, leading to a bond’s price being discounted.