Bond rout keeps stocks under water, China woes give dollar a lift
By Huw Jones
LONDON (Reuters) — Global shares were stuck around two-month lows on Friday, capping a week when bond investors became more convinced that interest rates will remain high for longer than initially thought, sending U.S. yields to near 16-year peaks.
Wall Street was headed for a weaker start, with little in the way of economic data for markets to digest, though Thursday's sell off in U.S. government bonds paused on Friday before the opening bell for U.S. stocks.
S&P 500 futures and Nasdaq futures were down by 0.5% to 0.8%
«The US calendar is empty today and the focus will likely be on bond market dynamics after back-end yields touched fresh multi-year highs yesterday,» ING bank analysts said.
The greenback was set for a fifth consecutive week of gains, its longest winning streak for 15 months, helped by the prospect of U.S. interest rates remaining high or rising even further, and a safe haven in the face of growing risks in China.
Crude oil was set to snap a seven-week winning streak as China's slowing economic growth clouded the picture for demand. The sour mood in markets extended to cryptoassets, with bitcoin hitting a fresh two month low.
Jason Da Silva, director, global investment strategy at Arbuthnot Latham, said stock markets were paying the price for bond yields soaring as economic data from the United States smash expectations, despite all the rate hikes so far.
The MSCI All Country stock index was down 0.3%, hitting its lowest since early June after falling 5.85% during August, though it remains 10% up for the year.
There was little market response to news of a package of measures from China's securities regulator to revive a sinking stock market.
Ten-year U.S. Treasury yields eased 8 basis points
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