Marketmind: Will Wall St bounce trump latest yield surge?
By Jamie McGeever
(Reuters) — A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.
Asian markets on Tuesday might take heart from Wall Street's impressive late show on Monday, but with the dollar and U.S. Treasury yields continuing their relentless march higher, the bigger picture looks much more ominous.
Add to that another wave of turbulence to rock the Chinese property sector and the yen sliding closer to 150 per dollar with still no intervention from Japanese authorities, and caution will probably suppress whatever risk appetite investors have.
Global shares, as measured by the MSCI World Index, may only have dipped less than 0.2% on Monday but it marked the seventh decline in a row, the index's worst run since late August-early September last year.
The MSCI Asia ex-Japan index also fell by a heftier 0.7%.
Wall Street's three main indexes rose, however, and the S&P 500 and Nasdaq's gains of 0.4% were particularly impressive given the latest leap in U.S. bond yields to new multi-year highs.
The back end of the U.S. yield curve is where the action is — the 10-year yield rose 10 basis points on Monday to 4.55%, the highest since 2007. As analysts at Deutsche Bank note, this is also historically significant territory — the 10-year yield's average going back to 1799 is around 4.50%.
The 10-year inflation-adjusted 'real' U.S. Treasury yield is also breaking new ground, climbing further above the 2% level. Analysts at Barclays point out that rising long-term U.S. real rates, especially after a Fed policy meeting, put emerging market currencies under near blanket pressure.
This largely played out on Monday — China's yuan slid back to a two-week low — and the dollar's broad value against
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