Yield Trade Unwind | Infratil Update Global markets sold off on Friday, as the US unemployment rate fell to near a 49-year low of 3.7%, pointing to a further tightening in labour market conditions. The data saw another rise in US Treasury yields, with the 10-year at its highest levels since 2011.  As we touched on last week and have discussed in the past, the pace of interest rate moves higher will be a key factor for driving markets, given the importance of interest rates for driving economic growth and influencing valuations. Further, “bond proxy” stocks are most vulnerable to higher interest rates. In the years following the Global Financial Crisis, sectors such as Utilities, Property trusts, and Telco’s saw large inflows from investors for their relative safety and high dividend yields, given interest rates on cash and bonds were so low – known as the yield trade. Now that rates are on the rise, it is likely that the yield trade will/already has begun to unwind, in our view.   Sto...