Bond Selloff Eases as Oil Cools, Stocks Rise - Europe Market Wrap
Bonds steadied after a sharp selloff pushed global yields to multi-decade highs, while cooling oil prices helped lift US and European equities. The 10-year Treasury yield fell 3 bps to 5.17%, trimming a two-day rise of more than 20 bps. Oil slipped below $105 a barrel as US-Iran negotiators explored a phased deal to reopen the Strait of Hormuz. S&P 500 futures rose 0.4%, led by chipmakers, while the Dollar ended a five-day run of gains. Oil-price volatility remained a key market driver as elevated energy costs continued to fuel inflation concerns and weigh on expectations for further monetary easing. Swaps were pricing around three additional Fed quarter-point hikes over the next year, keeping bond yields elevated and posing a risk to broader sentiment. In Europe, the Stoxx 600 headed for its strongest weekly gain since August, supported by a rebound in economically sensitive sectors, while regional bonds also recovered following the global selloff. The Yen was on track for its strongest daily gain in more than two weeks after Finance Minister Katayama renewed warnings over excessive currency moves. Katayama said Trump raised concerns about the Yen during talks with PM Takaichi in
Bonds steadied after a sharp selloff pushed global yields to multi-decade highs, while cooling oil prices helped lift US and European equities. 17%, trimming a two-day rise of more than 20 bps. Oil slipped below $105 a barrel as US-Iran negotiators explored a phased deal to reopen the Strait of Hormuz. 4%, led by chipmakers, while the Dollar ended a five-day run of gains.
Oil-price volatility remained a key market driver as elevated energy costs continued to fuel inflation concerns and weigh on expectations for further monetary easing. Swaps were pricing around three additional Fed quarter-point hikes over the next year, keeping bond yields elevated and posing a risk to broader sentiment. In Europe, the Stoxx 600 headed for its strongest weekly gain since August, supported by a rebound in economically sensitive sectors, while regional bonds also recovered following the global selloff. The Yen was on track for its strongest daily gain in more than two weeks after Finance Minister Katayama renewed warnings over excessive currency moves.
Katayama said Trump raised concerns about the Yen during talks with PM Takaichi in New York earlier in the week, easing some pressure after the resurgent Dollar had pushed the currency close to 160.