Bonds slump globally

A bond selloff that sent benchmark U.S. Treasury yields to the highest since 2011 spread into Asia and Europe on Thursday, spurring more gains for the dollar and triggering widespread declines in equities.

As America’s 10-year yield continued to climb — exceeding 3.2 percent — rates on European government bonds followed. The increase in what’s effectively the world’s benchmark risk-free rate also challenges appetite for other assets, and futures on the S&P 500 Index duly dropped alongside the Stoxx Europe 600 and MSCI Asia Pacific gauges. Emerging-market shares were hit particularly hard. The higher Treasury yields supported the greenback, and the Bloomberg Dollar Spot Index rose a sixth day. South Korea’s won was among the worst-performing currencies. While China’s markets are shut, the yuan slid past 6.9 per dollar in offshore trading.

The bond slump likely also reflects the growing impact of the world’s major central banks stepping back from stimulus. The ECB this month cut monthly asset purchases in half, while the Fed balance sheet unwind continues.

Futures on the S&P 500 Index decreased 0.5 percent as of 5:58 a.m. New York time, the lowest in more than a week on the largest dip in more than two weeks. The Stoxx Europe 600 Index dipped 0.7 percent to the lowest in more than two weeks. The U.K.’s FTSE 100 Index sank 1 percent to the lowest in two weeks on the largest decrease in more than four weeks. Germany’s DAX Index fell 0.3 percent. The MSCI Asia Pacific Index sank 1.2 percent to the lowest in three weeks on the largest tumble in more than four weeks. The MSCI Emerging Market Index sank 2 percent to the lowest in more than three weeks on the biggest tumble in more than six months.

West Texas Intermediate crude fell 0.1 percent to $76.30 a barrel, the largest fall in more than a week. Gold climbed 0.2 percent to $1,199.36 an ounce.