Rolling coverage of the latest economic and financial news
- Government bond yields hit one-year high
- Will inflation force central banks to raise interest rates?
- Last night, Nasdaq saw worst fall in four months
The market turmoil has been triggered by a ‘whiplash’ in bonds, says Reuters:
Asian stocks fell by the most in nine months on Friday as a rout in global bond markets sent yields flying and spooked investors amid fears the heavy losses suffered could trigger distressed selling in other assets.
In a sign the gloomy mood will reverberate across markets, European and U.S. stock futures were a sea of red. Eurostoxx 50 futures lost 1.7% while futures for Germany’s DAX and those for London’s FTSE dropped 1.3% each.
Yields on the 10-year Treasury note eased back to 1.538% from a one-year high of 1.614%, but were still up a startling 40 basis points for the month in the biggest move since 2016.
Stock markets across the Asia-Pacific region have fallen sharply today, following Wall Street’s lead overnight.
Japan’s Nikkei fell 4% to 28,966 points, Hong Kong’s Hang Seng is down around 3.4%, and Australia’s S&P/ASX 200 index has lost 2.35%.
“With the US economic outlook boosted by pandemic improvement, vaccine distribution and the prospects of President [Joe] Biden’s fiscal package getting through the Congress, investors are now fixated on the risk of inflation and economic overheating.”