Good Economic News Is Becoming a Double-Edged Sword for Markets
- Profit-taking set to continue as U.S. yields rise: Amber Hill
- Risk is that selling momentum takes life of its own: Manulife
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A rapid souring in financial markets on Monday highlights how even the most positive news for the world economy is no fillip to risk assets weighed down by the anchor of the global bond market.
Such is their sensitivity to rising Treasury yields, that the weekend approval of a $1.9 trillion U.S. stimulus package and a surge in China’s exports sent U.S. equity futures and other risk-sensitive assets lower. The Turkish lira and South African bonds tumbled while stocks sold off across much of Asia as the 10-year Treasury yield briefly pushed beyond 1.60%.