Stocks in Asia look set to advance Thursday after solid American economic data buoyed U.S. shares and sent Treasury yields closer toward 3.1 percent. The dollar steadied and the euro dropped amid political uncertainty in the region.Equity index futures in Japan, Australia and Hong Kong were all higher after the S&P 500 Index rose above its 100-day average and the Russell 2000 Index hit an all-time high. The 10-year yield extended recent gains as factory production and housing starts showed strength in the economy. The yen ticked higher in early Asian trading. Emerging-market equities rebounded after Tuesday’s plunge, but developing currencies turned lower.Signs that the world’s largest economy will continue to pick up steam comforted investors who have had to contend with surging U.S. bond yields, geopolitical tensions from Asia to the Middle East, and worries about global trade. Macy’s Inc. results bolstered the sense that U.S. consumers remain on strong footing, … [Read more...] about Asian Stocks Set to Gain; 10-Year Yield Eyes 3.1%: Markets Wrap
Bond 10 year yield
The 10-year U.S. Treasury yield rose to its highest level since 2011, extending a selloff in the world’s biggest bond market and raising fresh questions about how high America’s borrowing costs will climb. The dollar reached the strongest point since December.The global borrowing benchmark surpassed 3.0516 percent, the intraday peak from Jan. 2, 2014, and reached almost 3.06 percent on Tuesday in New York after a report showed retail sales rose in April. Bond traders are pricing in an even-more hawkish Federal Reserve, with the market-implied probability of three additional rate hikes this year now above 50 percent. That’s more than central bankers themselves have projected.On top of Fed tightening, Treasuries have come under siege from a flood of new issuance as the nation’s budget deficits widen. And inflation expectations are hovering near the highest since 2014, after years of doubts about whether prices and wages would increase.“Bearish price action … [Read more...] about U.S. 10-Year Yield Reaches Highest Since 2011 as Rout Deepens
With all the focus on the 10-year Treasury yield breaching 3 percent, investors may be missing the most important movement afoot in the world’s biggest debt market.It’s the spike higher in U.S. short-term rates that’s really flashing a warning signal for companies, share prices and consumers, according to Peter Tchir at Academy Securities Inc.The surge in two-year yields to the highest since 2008, is “the scariest chart for investors,” said the firm’s head of macro strategy. One-year bill rates are also the highest in almost a decade.“The 10-year yield might attract all the attention but higher short-term yields are more problematic, ” Tchir wrote in a note Wednesday. “Consumers who want to purchase large items are faced with higher costs. Investors can allocate to less risky bonds and out of dividend stocks and still get some yield.”“It’s absurd that everyone is falling all over themselves talking about the … [Read more...] about Two-Year U.S. Yields at 2008 Highs Are Scarier Than a 3% 10-Year
It happened. A U.S. 10-year at 3 percent is here, dragging the rest of the world's bond yields up with it.But the damage isn’t equally spread. Europe and Japan are anchored by some serious reluctance to let benchmark borrowing costs rise.Neither the European Central Bank nor the Bank of Japan look set to deviate from their negative interest rate policies anytime soon. The contrast with Federal Reserve couldn’t be sharper, with Chairman Jerome Powell forecasting three to four quarter-point rate increases over the next year.That’s not the only gulf. The difference between the U.S. and the other two major global bond markets could get a lot wider.Though 10-year German yields have doubled this year, they’re still only at 0.65 percent. This has pushed the spread to U.S. 10-year yields to more than 235 basis points from 170 basis points in July.But it is in the two-year where the gap is the widest. There, the spread between the U.S. and … [Read more...] about Who Cares About a 3% 10-Year?
The 10-year U.S. Treasury yield rose above 3 percent for the first time since January 2014, in a signal that higher interest rates are ahead in the world’s biggest bond market amid an onslaught of supply and a Federal Reserve intent on boosting interest rates.The yield, the benchmark for everything from U.S. mortgages to dollar bonds in developing nations, climbed as high as 3.0014 percent on Tuesday, before retreating to 2.99 percent as of 11:36 a.m. in New York. Traders have been focused on the next round number on the horizon for days, even though no clear catalyst emerged as the main culprit for the longest selloff in a year. The move reinforces that yields are on the rise in the $14.9 trillion Treasuries market. They surged in the first two months of the year, but pared that advance last month, leading some strategists to ponder whether 2018 might echo 2017, when optimism on the economy led yields to peak early in the year. Fed officials’ most recent forecasts are … [Read more...] about U.S. 10-Year Yield Breaching 3% Bolsters Calls for Higher Rates