Global bonds and the dollar track US yield surge
World stocks sag in response, except in Asia, and emerging markets slip
London —A rise in US treasury yields to their highest levels since mid-2011 pulled global bond yields higher across the board and boosted the dollar on Thursday, while stocks sagged in response. An influential survey of the US services sector showed activity at its strongest since August 1997, sparking speculation that the payrolls report on Friday could also surprise. Comments from US Federal Reserve chair Jerome Powell who said the economic outlook was “remarkably positive” and that rates might rise above “neutral” also helped the yield on the US 10-year treasury climb to 3.18% on Wednesday. Yields extended those gains on Thursday, having spiked to 3.2325% overnight, posting their steepest daily increase since the shock outcome of the US presidential election in November 2016. Markets are expecting an 80% probability of a Fed rate rise in December, said Jasper Lawler, head of research at London Capital Group. “The markets are re-assessing how far the Fed’s tightening cycle will go...
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