Stock markets mostly fell and oil prices climbed on Thursday as inflation fears, driven by a lack of progress in ending the Middle East war, drove a further sell-off in global bonds.
Investors were also on edge ahead of a high-stakes summit between US President Donald Trump and Chinese leader Xi Jinping at the White House.
The benchmark US 10-year Treasury yield rose to its highest level since 2007, while the 30-year yield reached its highest since 2004.
Japan’s 10-year yield jumped to a 30 year high during Asia trading hours.
“Bond yields are blowing out again partly because the US economy is booming”, said Neil Wilson, investor strategist at Saxo UK.
Strong US business activity data on Wednesday “played into the narrative of resilient growth, which in turn would enable the Fed to keep hiking rates to deal with inflation”, said Deutsche Bank’s Jim Reid.
A rebound in oil prices also added to inflation fears.
Frankfurt and Paris stock markets fell while London edged higher.
Oil prices were up more than one per cent, with international benchmark Brent remaining above $100 a barrel, as uncertainty swirled around the seven-month Middle East conflict.
The gains came a day after world leaders at the UN General Assembly offered little to suggest progress in ending the turmoil in the Middle East.
Hopes for a deal to get Gulf oil and gas flowing freely through the Strait of Hormuz as global leaders gathered in New York had sent oil prices down in recent sessions.
Trump and Xi met in the White House on Thursday, where thorny discussion topics were expected to include trade, technological competition — particularly in AI — and Beijing’s diplomatic and economic support for Tehran.
US Treasury Secretary Scott Bessent announced on Wednesday that the rival superpowers had agreed to extend a trade truce by two months.
“This extension was shorter than had been floated by US officials beforehand, but does offer more time to potentially reach a longer deal”, Reid said.
Shanghai shed more than one percent while Hong Kong closed down 0.3 per cent.
Japan’s Nikkei finished up 0.8 per cent on its first day back from a three-day break.
— AFP
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