Ten-year U.S. Treasury yields hit 3.1 percent on Thursday, as global markets continue to grapple with the outlook for the world’s largest economy. The pound jumped but then erased the move amid conflicting reports over Britain’s future in the EU customs union.
Benchmark yields traded little changed just over the 3.1 percent level. The euro weakened and Italian bonds dropped, extending a plunge from Tuesday as party leaders sealed an agreement to form a populist government which their members need to vote on. Gilts followed suit and sterling wiped out all of its advance amid reported denials of an earlier Telegraph story claiming the U.K. is prepared to stay in the customs union beyond 2021.
The Stoxx Europe 600 Index advanced, while U.S. stock futures slipped. Earlier in Asia equities rose in Japan and fell in Australia and Korea. West Texas oil climbed above $72 a barrel as Brent briefly topped $80 for the first time since 2014. The dollar edged higher.
Recent evidence that the world’s largest economy will continue to pick up steam is currently just a consolation prize for investors, who are having to adjust to the highest U.S. bond yields in years as well as second-guess issues stretching from peace on the Korean peninsula to Italian populists forming a government. Looming over it all are trade talks between the U.S. and China, the outcome of which could cement the global growth story — or derail it.
Elsewhere, the Turkish lira deepened its losses, while emerging-market stocks slipped.
Terminal users can read more in our markets live blog.
These are some key events to watch this week:
- U.S. jobless claims are due Thursday.
- Cleveland Fed President Loretta Mester speaks on monetary policy at an ECB conference in Frankfurt on Thursday.
- Chinese Vice Premier Liu He is expected in Washington for more trade talks.
And these are the main moves in markets:
- The Stoxx Europe 600 Index increased 0.2 percent as of 7:54 a.m. New York time to the highest in 15 weeks.
- Futures on the S&P 500 Index declined 0.2 percent.
- The U.K.’s FTSE 100 Index rose 0.2 percent to the highest in four months.
- Germany’s DAX Index rose 0.3 percent to the highest in 15 weeks on the biggest advance in a week.
- The MSCI Emerging Market Index sank 0.4 percent to the lowest in more than a week.
- The MSCI Asia Pacific Index dipped 0.1 percent to the lowest in a week.
- The Bloomberg Dollar Spot Index gained 0.1 percent to the highest in 20 weeks.
- The euro fell 0.2 percent to $1.1787, the weakest in five months.
- The British pound increased 0.1 percent to $1.3495.
- The Japanese yen decreased 0.2 percent to 110.65 per dollar, the weakest in more than 16 weeks.
- The Turkish lira sank 0.6 percent to 4.4417 per dollar.
- The yield on 10-year Treasuries increased less than one basis point to 3.10 percent, reaching the highest in about seven years on its fifth straight advance.
- Germany’s 10-year yield gained one basis point to 0.61 percent.
- Britain’s 10-year yield rose two basis points to 1.503 percent, the highest in more than three weeks.
- Italy’s 10-year yield climbed four basis points to 2.158 percent, the highest in about seven months.
- West Texas Intermediate crude increased 0.9 percent to $72.15 a barrel, the highest in more than three years on the biggest climb in more than a week.
- Gold dipped 0.2 percent to $1,288.39 an ounce, the weakest in 20 weeks.
- Brent crude gained 0.9 percent to $79.99 a barrel, the highest in more than three years.
— With assistance by Jeremy Herron, Andreea Papuc, and Sheldon Reback