(Bloomberg) -- A recovery in global bonds spread to U.S. equity futures as markets returned to firmer footing at the end of a week that saw the heaviest losses in the Nasdaq 100 since the pandemic meltdown.Markets stabilized after central banks from Asia to Europe moved to calm a panic that had sent U.S. government bond yields to their highest level in a year, with the tech-heavy Nasdaq shedding almost $900 billion of its value in a week.“If U.S. rates stabilize at these levels, which they appear to be, then equities will find calm,” said Nema Ramkhelawan-Bhana, a strategist at Rand Merchant Bank in Johannesburg. Fears that central banks withdraw support too fast may be overdone “given persistent rhetoric, with the Fed holding firm on its accommodation,” she said.Contracts on the Nasdaq 100 and S&P 500 fluctuated between modest gains and losses. The 10-year Treasury yield fell back below 1.5% after trading as high as 1.6% Thursday. Yields on core European bonds also ticked lower, while stocks in the region pared losses after the benchmark Stoxx Europe 600 slumped more than 1% at the open.Investors are getting increasingly worried that accelerating inflation could trigger a pullback in monetary policy support that has fueled gains in risk assets amid the pandemic. Federal Reserve officials so far say surging Treasury yields reflect optimism and have stressed that the central bank has no plans to tighten policy prematurely.What Investors Are Watching After the Spike in Treasury YieldsA gauge of shares in the Asia-Pacific region fell the most since the virus-induced selloff in March as benchmarks dropped more than 3% in Japan and Hong Kong.Elsewhere, oil retreated from its the highest in more than a year as traders mulled depleting global inventories. Bitcoin tumbled toward $45,000.Some key events to watch this week:Finance ministers and central bankers from the Group of 20 will meet virtually Friday. U.S. Treasury Secretary Janet Yellen will be among the attendees.These are some of the main moves in markets:StocksThe Stoxx Europe 600 index dropped 0.5% by 10:10 a.m. in London.S&P 500 futures rose 0.1%.Nasdaq 100 futures slipped 0.1%.The MSCI Asia Pacific index declined 3.3%.The MSCI Emerging Markets index retreated 2.8%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.3%.The euro was 0.5% lower at $1.2117.The British pound fell 0.6% to $1.3938.The Japanese yen was little chnaged at 106.18 per dollar.BondsThe yield on 10-year Treasuries dipped five basis points to 1.47%.Germany’s 10-year yield dropped two basis points to -0.25%.The yield on U.K. 10-year bonds was flat at 0.78%CommoditiesWest Texas Intermediate crude fell 1% to $62.88 a barrel.Gold fell 0.4% to $1,763 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The U.S. dollar rose against most major currencies on Friday, lifted by an increase in U.S. bond yields overnight, while the pound dropped to its lowest in over a week. Government bonds, and particularly U.S. Treasuries, have become the focal point of markets globally. Traders have moved aggressively to price in earlier monetary tightening than the Federal Reserve and other central banks have signalled.
(Bloomberg) -- Asian stocks fell the most since March as losses in technology shares deepened amid a global selloff triggered by rising Treasury yields.Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Tencent Holdings Ltd. contributed the most to losses in the MSCI Asia Pacific Index, which dropped as much as 3.2%. A gauge of the region’s technology stocks tumbled more than 4%, also the most since March.Friday’s selloff marks a sharp turnaround for equities which rallied for the most of January and February, pushing the Asian benchmark to a fresh record high. Equity benchmarks in South Korea, Taiwan and Japan slumped more than 3% each this Friday.“This rise in risk-free rates serves as a trigger to investors who have been looking for a reason for an equity market correction,” said Tai Hui, chief Asia market strategist at J.P. Morgan Asset Management. “The Asian tech sector and outperformers of the past 12 months may also mirror the sharper correction of their US counterparts.”The slump called to mind the painful episode for the region between May and June 2013 when the U.S. Federal Reserve suggested it would start slowly tapering its quantitative easing program and rattled global stocks. Asian shares were especially hard hit then, plunging 13% from a high hit in May, versus a 6% peak-to-trough decline in the S&P 500.On the positive side, central banks in Asia’s emerging economies added $467.7 billion to their foreign-exchange reserves last year, the most since the 2013 temper tantrum. That provides Asia with an important buffer against a recent jump in global bond yields.Bloomberg JPMorgan Asia Dollar Index, a trade and liquidity weighted index of Asian currencies, has gained more than 8% from a March low.“An analogy to the taper tantrum in 2013 and its impact on Asian markets versus the U.S. is misplaced,” said Thomas Poullaouec, head of multi-asset solutions at T. Rowe Price. “In 2013, Asian markets as well as emerging markets in general were a primary target of the rising yields given their vulnerability in their financing needs.”Poullaouec said that Asian countries are no longer as fragile as they were perceived in 2013, adding that the stocks that will be hit by higher yields will be those “in the most expensive part of the market” including growth names.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.