A bruising selloff in longer-term U.S. Treasury yields extended into a third session on Wednesday, as traders continued to dump bonds in a move that has confounded market participants for an asset class that is largely seen as a safe-haven. 

Fixed-income has traditionally been seen as providing a refuge from crashing equity markets and spiking recession fears. Investors would normally snap up bonds for safety, driving yields lower.

But that hasn't happened.

The benchmark U.S. 10-year Treasury yield (US10Y) on Wednesday briefly reached as high as 4.52%, marking its highest level since late February. It was last up 9 basis points to 4.39%.  

The turmoil in the bond markets has further slammed sentiment at a time when U.S. stocks are facing their biggest crisis since the COVID-19 market crash in 2020.

"Perhaps even more alarmingly, US Treasury markets are also experiencing an incredibly aggressive selloff as we go to press, adding to the evidence that they’re losing their traditional haven status," Deutsche Bank's Jim Reid said on Wednesday.

Apollo Asset Management on Tuesday said one of the reasons for the bond selloff appears to be a broader unwinding of the basis trade by hedge funds, who are offloading their Treasury positions.

Meanwhile, there is speculation that foreign holders of U.S. bonds - especially the benchmark US10Y - could be dumping them as a counter to tariffs.

"Fixed-income investors may be starting to worry that the Chinese and other foreigners might start selling their U.S. Treasuries," Yardeni Research said on Tuesday.    

At the start of this week, the US10Y was sitting at 3.90% and has since exploded higher by 55 basis points. Also, similar activity is being observed in the 20-year yield (US20Y) and the 30-year yield (US30Y). 

“The Bond Market has entered the trade war. Yields up sharply as trade war with China accelerates. Best guess is the basis trade is causing yields to surge,” Kathy Jones, chief fixed income strategist at Charles Schwab said.  

Highlighted below is a quick snapshot on where Treasury yields sit across the curve:

• U.S. 2 Year Treasury yield (US2Y) is at 3.78%.
• U.S. 5 Year Treasury yield (US5Y) is at 4.00%.
• U.S. 10 Year Treasury yield (US10Y) is at 4.39%. 
• U.S. 20 Year Treasury yield (US20Y) is at 4.89%.
• U.S. 30 Year Treasury yield (US30Y) is at 4.82%. 

Treasury and Fixed Income ETFs: (NASDAQ:TLT), (NYSEARCA:TLH), (NASDAQ:IEF), (NASDAQ:IEI), (NASDAQ:SHY), (NYSEARCA:SGOV), (NYSEARCA:SCHO), (NYSEARCA:BIL), (NYSEARCA:AGG), (NASDAQ:BND), (NASDAQ:VCIT), (NYSEARCA:MUB), (NASDAQ:MBB), (NYSEARCA:JNK), (NYSEARCA:LQD), (NYSEARCA:HYG), and (NYSEARCA:TIP).