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Resurgent concerns about rising U.S. bond yields hit global equities on Thursday as investors waited to see whether Federal Reserve Chairman Jerome Powell will address concerns about the risk of a rapid rise in costs of long term loan.
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The specter of rising US bond yields has also plagued low-yielding safe-haven assets, such as the yen, Swiss franc and gold.
Benchmark 10-year U.S. Treasuries climbed to 1.477%, with investors betting inflation in the U.S. could accelerate as the economic recovery accelerates, driven by government stimulus and government stimulus. new advances in immunization programs.
“It is not clear how the Fed wants to manage bond yields,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
“The pace of rising yields has been much faster than most people expected and there is speculation that authorities may start to think about tightening their policy.”
MSCI’s Asia-Pacific ex-Japan stocks fell 1.7% at the start of trading, while Japan’s Nikkei fell 1.9%.
TECHNOLOGY STOCKS APPROPRIATE TO INCREASING BONDS YIELDS
Futures on E-mini S&P slipped 0.4% while futures on Nasdaq, the unequivocal leader of the post-pandemic rally, fell 0.6% to a two-month low .
Tech stocks are vulnerable because their high valuation has been supported by expectations of a prolonged period of low interest rates.
Powell is scheduled to speak at 12:05 p.m. EST (5:05 p.m. GMT). Many Fed officials have played down the rise in Treasury yields in recent days, although Fed Governor Lael Brainard on Tuesday admitted concerns that a rapid rise in yields could dampen activity economic.
The market will face a huge increase in debt sales after rounds of stimulus measures to deal with a recession triggered by the pandemic.
The problem isn’t confined to the United States, with the UK 10-year Gilts yield rising to 0.779%, close to its 11-month high of 0.836% reached last week, after the government unveiled much higher borrowing. .
Currency investors continued to climb on dollars, betting on a US economy outperforming its peers in the developed world in the months to come.
The dollar hit a seven-month high at 107.16 yen.
“The US dollar / yen has been on a one-sided path since early 2021,” said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia.
“The improving outlook for the global economy is positive for both the US dollar / yen and the Australian dollar / yen.”
Other safe haven currencies were weak, with the Swiss franc flirting with a four-month low against the dollar and a 20-month low against the euro.
Gold hit a nine-month low of $ 1,702.8 an ounce on Wednesday and last stood at $ 1,711.5.
Other major currencies were little moved, with the euro holding steady at $ 1.2054.
Investor focus on a rebound in the U.S. economy was not shaken by overnight data that showed the U.S. labor market struggling in February, when private payrolls plummeted. increased less than expected.
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Oil prices rose for a second straight session early Thursday, as the possibility that OPEC + producers would decide not to increase production at a key meeting later in the day was supported by a decline US fuel stocks.
US crude rose 0.3% to $ 61.44 a barrel.
(Additional reporting by Koh Gui Qing in New York; editing by Sam Holmes and Richard Pullin)
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