Doubts are re-emerging over the global recovery at a time when the U.S. Federal Reserve is set to taper stimulus and the Biden Administration is stuck in contentious debt ceiling negotiations that could lead to a government shutdown.
Benchmark 10-year rates have gained 25 basis points in five sessions and were last at 1.5513%, having hit their highest since mid-June the day before, while the dollar index was at 93.752.
Higher yields and the strong dollar hurt Asian equities in early trading. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1.43% with Australia (.AXJO) off 1.5%, and South Korea (.KS11) falling 2.06%.
The Hong Kong benchmark (.HSI) shed 1.2% and Chinese blue chips (.CSI300) were 1.1% lower.
Japan's Nikkei (.N225) shed 2.35% hurt by the general mood as the country's ruling party votes for a new leader who will almost certainly become the next prime minister ahead of a general election due in weeks.
· Evergrande to sell $1.5 billion stake in Chinese bank, as it faces another bond interest payment
Ahead of another interest payment deadline, Chinese developer Evergrande announced it will be selling off a $1.5 billion (9.99 billion yuan) stake in Shengjing Bank to a state-owned asset management firm.
The pan-European Stoxx 600 climbed 0.8% in early trade, with retail stocks adding 1.2% to lead gains while oil and gas stocks dropped 0.8%.
European market attention will be on central banks today with U.S. Federal Reserve Chairman Jerome Powell, European Central Bank President Christine Lagarde, Bank of Japan Governor Haruhiko Kuroda and the Bank of England’s Governor Andrew Bailey all speaking at the ECB Forum on Central Banking on Wednesday.
· U.S. stock futures rise after Nasdaq tumbles in rate induced sell-off
U.S. stock futures were higher Tuesday night after the Nasdaq plummeted in its worst day since March as a spike in bond yields sent stocks tumbling.
Dow Jones Industrial Average futures rose 108 points. S&P 500 and Nasdaq 100 futures both traded in positive territory.
Reference: Reuters, CNBC
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