Pre-market Update: Stocks Lower as Treasury Yields Hit 7-Year High

Global stocks continue to stumble as US Treasury yields surge to a 7-year high.  The yield on the benchmark 10-year Treasury note was higher at around 3.25% in the Asian trading session.  The rapid rise of Treasury yields is drawing investors out of equities and into Treasuries.

However, US Treasuries prices (which act inversely to yields) still face downward pressure due to a glut of $230 billion issuances this week.  At the same time, traditional buyers like China and the Federal Reserve are reducing their holdings.  The rise in Treasury supplies and softening overall demand will continue to pressure prices down.

Accordingly, Asian stocks started the day down for the most part.  A couple of the notable moves across Asia today:

  • Japan’s NIKKEI 500 Index moved down 2.17%;
  • The Shanghai Composite Index gained 0.17%;
  • Hong Kong’s Hang Seng Index is down 0.11%;
  • South Korea’s KOSPI Index is closed today;
  • India’s SENSEX gained 0.51%.

European stock markets are falling at the open today also.  A look at some of Europe’s top indices shows:

  • London’s FTSE Index is down 0.32%
  • The German DAX Index dropped 0.52%;
  • The FTSE Italia All Shares Index is down 0.60%;
  • The French CAC 40 Index fell 0.28%  at the open.

European stock markets will continue to focus on issues within their own markets such as the Brexit negotiations and the Turkish Lira Crisis.  Additionally, European investors are keeping a close eye on developments in Italy as investors have become fearful of potential anti-EU measures by the new government.

US Futures Are Trading Lower in Pre-Market Action

The U.S. stock market is moving lower in pre-market trading.   Indeed, the NASDAQ and the S&P 500 futures are down 0.46% and 0.48%, respectively.

Investors will continue to take their cues from the news cycle heading.  Accordingly, any new developments in the Trump legal morass or global trade disputes could see it drive markets in either direction.

See more of our analysis here.

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Al Basoglu

I am a financial services professional with over a decade of experience in various roles. I've lived and worked abroad in 5 different countries while pursuing personal and professional challenges. My interests include markets, history and different cultures. I tend to weave all of my interest into my analysis and articles.