Sina American Stock Market News Beijing time February 20 Bloomberg NewsThe alarm has been sounded, and bond market movements suggest that the yield on 10-year US Treasuries could reach 3 per cent this week-a level that could be a potential watershed in risk appetite for all types of assets.

Bonds are concentrated in large supply, inflation fears consolidate the short side, or together push up benchmark yields. The yield on 10-year Treasuries is now at about 2.9 per cent, and the US Treasury will issue a large number of bonds this week, including an auction of $151 billion in short-term notes and $28 billion in two-year bonds later on Tuesday.

The 3 per cent mark, above which the last close was in December 2013, is highly symbolic and could have a significant impact on portfolios, from pushing up corporate funding costs to eroding overall credit returns and limiting stock valuations, to name but a few.

"it feels like the market wants to test the 10-year Treasury yield at 3%."Holland InternationalMartin van Vliet, senior interest rate strategist for the group in Amsterdam. "after reaching 3%, I expect a lot of new bulls to enter. "

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In 2017, volatility in the US bond range and stable inflation expectations set the tone of the "blonde girl" in financial markets, driving generous returns on stock markets, corporate bonds and other types of financial assets around the world.

This relationship may be broken at a time when bond yields are set to rise. CrossBorder Capital, for example, estimates that this year's 10-year Treasury yield may test 3.5% and trigger a series of repricing, causing waves across the market.

"US safe assets-the dollar and US debt-are overvalued by 10 to 20 per cent," CrossBorder said. As prices pull back, the prices of more traditional risky assets will fall similarly, much as they did in 1987 and 1994. "

Even bond bulls such as BMO Capital Markets's Aaron Kohli estimate that US bond yields will be tested at 3 per cent in the coming trading days.

"there is a large supply, and some support levels have not been held," he said, referring to the 10-year bond yield that broke through 2.94% last Thursday and expects the market to test again this week.