The Global Response to Rising Yields
What’s in Today’s Report:
- Monitoring the Response to Rising Yields
- ISM Manufacturing Index Takeaways
Stock futures are trading with mild losses this morning as yesterday’s gains are digested amid cautious comments out of China overnight and mixed economic data in the EU.
Guo Shuqing, a top Chinese banking regulator, said overnight that the divergence between asset rallies (he referred to them as bubbles) and economic growth in the U.S. and EU will result in corrections “sooner or later” which weighed on Asian stocks.
German Retail Sales missed expectations however a key European inflation gauge, the HICP, was in line with estimates, leaving dovish policy expectations for the ECB largely intact.
Looking into today’s session, there is just one economic data point: Motor Vehicle Sales (E: 16.4M) which should not move markets.
That will leave market focus on today’s two Fed speakers: Brainard (1:00 p.m. ET) and Daly (2:00 p.m. ET) as the market looks for further confirmation that the Fed remains unanimously committed to extremely accommodative policy for the foreseeable future.
Outside of economic data and Fed chatter, the bond market remains a major factor for equity market trading right now as if there is another disorderly spike in Treasury yields, it is safe to expect more volatility in the broader stock market, specifically big name tech companies.