Global stocks stuck near 5-week lows, China cuts rates
By Dhara Ranasinghe
LONDON (Reuters) -U.S. stock futures looked to open lower on Tuesday as rising government bond yields unnerved investors, while rate cuts from China and disappointing data underscored the economic malaise gripping the world's second biggest economy.
U.S. stock future indices both declined about 0.6% while Asian shares fell 0.4%.
U.S. 10-year Treasury yields hit year highs at around 4.24%, while Germany's benchmark 10-year bond yield rose to its highest since March as a selloff in bonds, driven in part by resilient U.S. economic growth, deepened.
«We have seen resilient markets but the rise in bond yields and how that gets resolved will be important in the second half of the year,» said Tim Graf, head of EMEA macro strategy at State Street (NYSE:STT) Global Advisors.
Emerging markets remained in focus a day after Argentina devalued its currency by nearly 18%, while Russia's central bank on Tuesday raised interest rates by 350 basis points at an extraordinary meeting following a fresh slide in the rouble.
European stocks fell almost 0.8%. UK and Swedish stocks led declines among European peers after inflation data from both countries triggered worries about high interest rates.
This all left MSCI's world equity index, heading back towards five-week lows touched on Monday.
CHINA CUTS, RUSSIA HIKES
Cuts to China's one-year loans to financial institutions, at 15 basis points, were the largest since the outset of the COVID pandemic. Industrial output and retail sales growth both slowed from a month earlier to a year-on-year pace of 3.7% and 2.5% respectively, missing expectations.
The yuan dropped to its lowest in 9-1/2 months, and sources told Reuters that China's major state-owned banks stepped into
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