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Treasuries remain under pressure as traders weigh growth outlook

European equities rose on Monday, while US government debt remained under pressure as investors considered developments in Ukraine and the likelihood that central banks would tighten monetary policy to curb inflation.

The Stoxx Europe 600 regional stock index – which has fallen by almost 6% a year but has erased losses since Russia invaded Ukraine in late February – added 0.4%. The German Dax index traded unchanged and the London FTSE 100 index rose 0.2%.

Futures that follow the Wall Street S&P 500 rose 0.1%, while those that follow the high-tech Nasdaq 100 added 0.3%.

“We have to be modest and say that the range of possible outcomes, given the war and the inflation forecast, is really quite broad,” said Caspar Almagrin, head of the stock exchange at Amundy. “Growth in the eurozone is declining, but a recession is not clear because the balance sheets of consumers and businesses are quite strong.”

The yield curve of the Ministry of Finance is now at the opposite peak since 2007, when it was measured by the difference in credit costs for two years and 10 years. U.S. government bonds have registered theirs Worst quarter in records In the first three months of this year, when traders looked ahead to a series of rapid interest rate hikes by the Federal Reserve.

The yield on the two-year Treasury bill, which moved in the opposite direction to its price, rose on Monday by 0.02 percentage points to 2.45%. This yield, sensitive to interest rate changes, rose last week above that of 10 years For the first time since 2019. The 10-year yield on the banknote – a global credit cost benchmark, which is in line with inflation and growth expectations – added 0.03 percentage points to 2.41%.

An inversion of this part of the closely observed yield curve is generally perceived as a sign of an impending recession. However, economists and policymakers are debating whether the Fed’s huge bond buying program in the epidemic era distorted the bond market, skewing yields.

Ante Markowska, chief financial economist at Jeffries, said there is “little evidence that we are in a late-cycle economy” as recessions tend to overlap with periods of “company reorganization, driven by significant marginal compression.

“The margins have only just begun to shrink and are still close to highs in cycles,” she added. “It does not look like a corporate sector that is about to embark on a cost-cutting campaign.”

In Hong Kong, stocks rose sharply after Chinese regulators calmed restrictions restricting U.S. authorities’ access to audits.

The Hang Seng Tech Index closed up 5.4 percent, with video platform Bilibili and electric car maker Li Auto among the biggest gains – gaining 13.3 percent and 10.2 percent, respectively.

The rise in the share price came after the Securities and Exchange Commission in China, Beijing’s senior financial watchdog, Said on Saturday It will change the rules of confidentiality that have prevented its overseas companies from providing sensitive financial information to foreign regulators.

US Securities and Exchange Commission Said last month That China’s major companies had three years to provide detailed audit documents or deal with delisting, which accelerated the sale of Chinese technology stocks traded in the US and Hong Kong.

Saturday’s announcement was supposed to create a framework for U.S. regulators to gain access to the company’s audit files.

The technological rises helped the Hang Seng Index climb 2.1% on Monday. Markets in mainland China have closed for the holiday. Japanese Topix rose 0.5%.

Oil prices rose after falling last week as Brent crude, the international index, rose 0.3 percent to $ 104.66 a barrel.

Treasuries remain under pressure as traders weigh growth outlook Source link Treasuries remain under pressure as traders weigh growth outlook

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