Global bond rout eases; dollar extends gain

Oil retreats and Bitcoin tumbles towards $45,000

Global bonds steadied yesterday as markets returned to firmer footing at the end of a week that saw the steepest decline in the Nasdaq 100 since the pandemic meltdown.

Markets stabilised after central banks from Asia to Europe moved to calm a panic that had sent US government bond yields to their highest level in a year and triggered a loss of almost $900 billion in the value of the tech-heavy Nasdaq, the biggest since March.

Contracts on the Nasdaq 100 and S&P 500 fluctuated before turning modestly lower. The 10-year Treasury yield fell back below 1.5 per cent after trading as high as 1.6 per cent Thursday, while the dollar extended a rally to head for its best week since October.

Investors are getting increasingly worried that accelerating inflation could trigger a pullback in monetary policy support that has fuelled gains in risk assets amid the pandemic. Federal Reserve officials so far say surging Treasury yields reflect optimism.

Yields on core European bonds ticked lower, and stocks in the region pared losses after the benchmark Stoxx Europe 600 slumped more than 1.5 per cent at the open.

Elsewhere, oil retreated from it’s the highest in more than a year as traders mulled depleting global inventories. Bitcoin tumbled towards $45,000.

Sharp turnaround

Asian stocks fell the most since March as losses in technology shares deepened amid a global sell-off triggered by rising Treasury yields.

Yetsreday’s sell-off marks a sharp turnaround for equities which rallied for the most of January and February, pushing the Asian benchmark to a fresh record high. Equity benchmarks in South Korea and Japan slumped more than 3 per cent each yesterday.