Asian Markets and Yields Surge
Asian stocks slip and treasury yields hit 22-year highs as oil prices climb.
Anonymous
Asian and emerging-market shares mostly fell as oil prices climbed amid stalled U.S.-Iran talks, after President Donald Trump rejected Tehran’s proposal to reopen the Strait of Hormuz. Brent crude rose above $107 a barrel, while record diesel prices heightened concerns that energy costs could keep inflation elevated. The 30-year Treasury yield neared its highest level since 2004, and markets priced in a strong chance of another Federal Reserve rate increase in October and further tightening into next year; a possible Reserve Bank of Australia rate increase was also in focus. Losses were pronounced in South Korea, China and India, while Hong Kong and Australia rose, Japan was nearly flat, and emerging-market stocks slid, led by chipmakers. Strong U.S. and global activity and earnings expectations offered some support, as investors faced a busy week of economic data and policy decisions.
Key Points
1
The U.S. 10-year Treasury yield rose above 5.27%, a 19-year high, after gaining nearly 50 basis points during September; the two-year yield also approached 5% after rising more than 57 basis points that month.
2
A $150 billion increase to Nvidia’s share-buyback plan helped limit the Nasdaq’s overnight decline to 0.9% despite the pressure from rising yields.
3
The Atlanta Federal Reserve’s GDPNow tracker was forecasting 5% U.S. economic growth for the quarter; the article also cited resilient activity in parts of Asia and Europe, supported partly by investment in artificial intelligence.
4
India’s Nifty 50 and Sensex fell more than 1% amid the tensions, with volatility also expected ahead of the Tuesday expiry of Nifty and Bank Nifty contracts.
5
Japan’s prime minister said Donald Trump had raised concerns about the yen’s weakness, while Finance Minister Satsuki Katayama described the currency’s undervaluation as problematic.
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