Stocks Fall and Bonds Continue to Sell as Oil Rises – Asia Market Wrap
The selloff in global bonds continued as the standoff over the Iran war drove oil prices higher, fuelling inflation concerns and increasing betting that central banks will continue to tighten policy.
Treasuries fell throughout the curve, with the 30-year yield reaching its highest level in nearly three years amid investor concerns about growing inflation. Japan’s 10-year yields rose 10 bps to levels not seen since 1996, while the 30-year yield soared 20 basis points to its highest level since its 1999 debut. Bonds also fell in Australia and New Zealand.
As bond yields rose, equities fell further from their record highs. Asian stocks sank 0.9%, while South Korea’s Kospi, the world’s best-performing index this year, overcame initial losses to advance 0.4% as Samsung Electronics recovered. Equity-index futures predicted further losses for Europe and the US.
Meanwhile, grain futures in Chicago rose on Monday as the White House announced an extra commitment by China to buy US farm goods, raising hopes that crop exports beyond soybeans will increase.
Shanghai shares slumped after China’s growth slowed overall in April, with investment resuming falls and retail sales and industrial output falling short of expectations.
