Joint
The selloff in global bonds deepened as the benchmark Treasury yield hit a one-year high (1.46%), putting pressure on the global fixed-income market. Across markets, investors are betting on a brighter outlook for the global economy and the risk that inflationary price pressures are just around the corner, following an unprecedented surge in commodity prices recently. In equities, Nasdaq 100 futures for technology stocks fell as the Russell 2000 index of small caps rallied. In comments this week, Federal Reserve Chairman Jerome Powell offered reassurance that policy would continue to support the economy beyond a temporary spike in inflation, especially from a low base. That has given the bond market plenty of reason to keep pushing yields higher. Asian and European stocks are advancing. Energy and mining companies led the gains on the Stoxx 600 Index, while South Korea's benchmark index rose 3,5%.
Fixed rent
The inflation-adjusted US 10-year yield rose to its highest level in more than seven months, a warning sign for riskier assets that have benefited from exceptionally loose financial conditions amid the pandemic. Treasuries extended the sell-off early in the US session, with 10-year yields rising by as much as 9bp, approaching the 1,50% level last seen more than a year ago. US yields gradually edged higher during the Asian session as regional investors stayed on the sidelines and into the European morning. The slide in global government bonds gained momentum, with Australian and Kiwi bunds sharply lower after the RBA's composition buying disappointed traders. Treasuries are 1pp-7bp cheaper across the curve, with 10s around 1,44% after touching 1,466% in the opening session, while 30-year yields edged higher at 2,332%, both the highest levels in over a year. Longer-term yield weakness extends the steep curve, with 2s-10s ~5bp wider, while the 5s-30s spread remains within Wednesday's range. End-of-month demand may start to support the long end of the curve; a 0.14yr duration extension has been estimated for the Bloomberg Barclays Treasury Index on March 1, versus 0,12 years on average over the past decade. The auction cycle concludes with the sale of 7-year bonds for US$62.000m at 1pm ET, following Wednesday's soft 5-year bond sale that lowered the WI by 0,6bp. WI 7-year ~1.095% is above auction stops since February 2020 and ~34% cheaper than last month. Three-month dollar Libor +0.08bp to 0.19050%. Fed speakers include Bostic (8:30 a.m.), George (9:30 a.m.), Bullard (10:30 a.m.), Quarles (11:10 a.m.), and Williams (3 p.m.). The 10-year Treasury yield rose 1,43 basis points to 10%. Germany's 0,28-year yield rose 10 basis points to -0,153%. Japan's 10-year yield rose 0,77 basis points to XNUMX%. Britain's XNUMX-year yield advanced XNUMX basis points to XNUMX%.
Money Exchange
The Colombian peso (COP) appreciated for the first time in five days, gaining 0,8% on Wednesday, closing at $3.565 per dollar. Although the dollar continues its weakness and commodity prices reach new highs following reassuring comments from Jerome Powell, the global bond sell-off increases risk perceptions, generating a differentiated impact in the region. While the Peruvian sol and Chilean peso strengthened, the Mexican peso and Brazilian real registered higher levels than the previous day's closing price.
Variable income
US stock futures are trading with a bearish bias, reversing their initial upward trend, after a cautious sentiment appears to be taking hold in the markets again. On Wednesday, the Dow Jones Industrial Average closed at an all-time high after a volatile session, the S&P 500 Index advanced 1.1%, while the Nasdaq Composite gained 1%, recovering from early losses. In premarket trading, rising rates are limiting appetite for stocks and hampering the outlook for the growth-oriented technology sector, as the 10-year Treasury yield topped 1.4%, its highest level since February 2020. Futures contracts linked to the Dow Jones Industrial Average are oscillating between slight gains and losses, with little change, S&P 500 futures are down around 0.3%, and Nasdaq 100 futures are down nearly 1%, with Tesla and Facebook stocks losing ground in premarket trading. Investors are awaiting key economic indicators to be released later in the session as earnings season draws to a close. On the reporting front, several companies are set to release quarterly results: Best Buy, Papa John's, and Domino's Pizza are reporting before the bell. After the market closes, Salesforce.com, Beyond Meat, Etsy and Caesars Entertainment, Airbnb and DoorDash publish their reports after the market closes.
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