British markets are among the biggest victims of a global bond selloff that has spilled over into currencies and stocks this week. Yields on long-dated British government bonds are at their highest in decades – putting government finances under pressure – while sterling is struggling and British domestic stocks are underperforming. Britain’s Treasury says it will maintain an “iron grip” on the public finances and Treasury minister Darren Jones told parliament the UK bond markets “continue to function in an orderly way.” Here are six charts setting out the market ...

Traders’ confidence in the pound has taken its biggest dive this week since the 2022 UK budget crisis, according to the options market, as a global bond selloff added to growing unease over Britain’s finances and sent bond yields to 16-year highs. The options market shows traders are positioned more bearishly against the pound than at any time since early 2023, as the market was emerging from the wild swings unleashed by then-Prime Minister Liz Truss’ mini-budget in September 2022. This week, 10-year gilt yields (GB30YT=RR) have risen by a ...

U.S. investors pulled out of equity funds and moved to the safety of money market funds in the week to Jan. 8 driven by uncertainties about the Fed’s interest rate trajectory and looming tariff policies by the incoming Trump administration. Investors divested a net $5.05 billion worth of U.S. equity funds during the week and acquired a robust $56.19 billion worth of money market funds in their largest weekly net purchase since Dec. 4, 2024, according to LSEG Lipper data. The U.S. Federal Reserve’s Dec. 17-18 meeting minutes, released Wednesday, ...

Longer-dated U.S. Treasury yields jumped to their highest levels since November 2023 on Friday after data showed employers added 256,000 jobs in December, far surpassing economists’ expectations, while the unemployment rate fell. Employers were expected to have added 160,000 jobs during the month. The unemployment rate dipped to 4.1%, below forecasts for 4.2%. “This report will fuel yields even higher. The labor market is not showing any signs of weakening,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. Traders are now betting the Federal Reserve ...

China’s central bank suspended treasury bond purchases on Friday, briefly lifting yields and spurring speculation it is stepping up defence of the yuan currency which has been sliding since the election of Donald Trump as U.S. president. The move breaks with five months of buying and coincides with a brutal selloff in global bond markets, suggesting the People’s Bank of China is also trying to ensure yields at home rise in tandem, or at least stop falling, analysts say. Yields, which move inversely to bond prices, jumped following the announcement, ...

Global share markets were under pressure on Friday as investors counted down to a U.S. jobs report later in the day that could exacerbate or ease the sell-off in the global bond market, while the dollar stood near two-year highs. Both Nasdaq futures and S&P 500 futures were down 0.3%. Wall Street was closed overnight to mark the funeral of former U.S. President Jimmy Carter. Pan-European STOXX 50 futures and UK FTSE futures were flat. The closely watched U.S. nonfarm payrolls report is due at 0830 U.S. Eastern time (1330 ...

U.S. financial markets last year were more sensitive to economic surprises than usual, and as Donald Trump prepares to begin his second term as U.S. president investors should buckle up for more of the same in 2025. Especially in Treasuries. The 10-year yield’s sensitivity to inflation and activity data surprises last year was the highest in more than 20 years, according to Goldman Sachs. Although inflation has fallen, growth fears have ebbed, and the Federal Reserve has started cutting interest rates, these sensitivities persist. Again, especially in Treasuries. While equities’ ...

USD: Payrolls should keep Fed cautious The December US jobs report is released today and consensus is for a 138k payroll print and unchanged 4.2% unemployment rate. Our economics team also expects 4.2%, but is flagging room for a surprise on the strong side. Our house projection is 160k. We think the balance of risks is tilted to the upside for the dollar today, as robust jobs figures could prompt markets to price out a March cut and potentially push the first fully-priced move beyond June. We would still argue ...

Investors in European equities all likely have the same new year’s resolution: figure out how to navigate what promises to be 12 months of heightened economic and geopolitical uncertainty. One tactic is to focus on companies with a proven track record of stable earnings growth during all market environments, but what may be surprising is where investors can find these ‘steady compounders’. Global economic policy uncertainty is currently elevated, which is understandable given the many political changes and economic surprises seen in the past year. This lack of clarity is ...

NASDAQ-Adv: 4,096 Dec: 6,154 NYSE-Adv: 1,869 Dec: 2,275 (Source: Nasdaq)

Bearish bets on most Asian currencies climbed to multi-month highs as prospects of fewer U.S. interest rate cuts this year continued to boost dollar demand, while the threat of potential U.S. tariffs undermined the appeal of risky Asian assets, a Reuters poll showed on Thursday. Short bets on the Chinese yuan rose to their highest since June 2023, while those on the Malaysian ringgit and the Indonesian rupiah reached a seven-month high, according to a fortnightly poll of 13 respondents. The yuan, which has been trading near 16-year-lows against the ...

Market gyrations in recent days have showcased how sensitive prices are to tariff-related headlines. For JP Morgan quantitative strategists, it looks like there is still room for U.S. equities, credit and even industrials stocks to outperform on tariff news. In a note, they say over the past week tariffs-related press reports have prompted questions in their conversations over how such risks have been priced in markets. To attempt to answer, they compare market moves during Trump’s 2018 tariff episode to today’s, using Aug 1 2024 as a starting point for ...

The U.S. dollar advanced for a third straight session on Thursday as Treasury yields dipped but remained at elevated levels on concerns over tariffs under the incoming Trump administration, while sterling’s recent weakness persisted. U.S. Treasury yields have been on an uptrend, with the benchmark 10-year note hitting an 8-1/2 month high of 4.73% on Wednesday as a resilient economy and likely tariffs have rekindled inflation concerns and fueled expectations the Federal Reserve will take a slower path of interest rate cuts. Recent economic data has shown a labor market ...

China, the global growth engine for the last 20 years, now boasts lower long-term bond yields than Japan, the former poster child for deflationary economic stagnation. This may signal that the “factory to the world” faces the real risk of “Japanification.” China’s bond yields have plunged to their lowest levels on record, with the two-year yield about to break below 1.00%, having been 1.50% only a few months ago. Remarkably, China’s 30-year yield recently fell below the Japanese Government Bond (JGB) yield for the first time ever. That phenomenon looks ...

PIMCO, one of the world’s largest bond investors, said it is still positive about UK government bonds amid a steep market-sell off, adding that much of the increase in yields has been driven by the U.S. Treasury market. The $2 trillion asset manager said the chances are rising that British finance minister Rachel Reeves will have to find new savings as a result of the rise in borrowing costs. “Although UK-specific factors, such as the budget, have contributed to the rise, most of the increase has been driven by rises ...