Stocks Slide With Bonds After US Yield Spike – Europe Market Wrap

Stocks sank as bonds retreated, reflecting a decline in US Treasuries overnight after lacklustre debt auctions and aggressive words from a Federal Reserve speaker.

Europe’s Stoxx 600 sank 0.6% and futures pointed to a similar loss on Wall Street. UK 10-year rates rose five basis points, but yields on similar-maturity German paper fell from a six-month high after regional inflation data came in lower than the monthly forecast for the national number.

Markets are feeling the aftershocks from a poor US day, when weak demand for US note sales, strong consumer confidence data and central bank discourse fanned hopes interest rates will stay up. There’s an auction of seven-year Treasuries later Wednesday and a significant US price growth report is in focus at the end of the week.

After climbing nine basis points on Tuesday, 10-year Treasury rates edged higher to 4.56%. The Stoxx 600 is expected to gain 2.2% in May, while the S&P 500 was up 5.4% as of Tuesday’s closing.