Asian stocks dip, bonds in focus after torrid September
TLT•Asian stocks were subdued and global bonds remained under pressure as investors weighed softer-than-expected U.S. inflation, which reduced the market-implied chance of an October Fed rate hike to 38% from 50%. The U.S. 10-year Treasury yield reached 5.306%, its highest since June 2007.
1. Stocks and bonds
Asian stocks dipped after a difficult September, while global bonds remained under pressure. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2%, South Korea’s KOSPI eased 0.14%, and Japan’s Nikkei rose more than 1%; Nasdaq and S&P 500 futures were up 0.3%.
2. Yields reach highs
The U.S. 10-year Treasury yield hit 5.306%, its highest level since mid-June 2007. The 30-year yield was 5.634%, after reaching 5.6517% in the previous session, its highest since June 2002. Investors are focused on how long Treasury yields remain above 5%.
3. Inflation and oil
U.S. inflation rose less than expected in August, prompting traders to lower the perceived chance of a Federal Reserve rate hike on October 28 to 38% from 50% a day earlier. Micron’s earnings did not lift Asian AI stocks, while stalled U.S.-Iran peace talks kept attention on oil exports; Brent crude was at $98.15 a barrel after rising more than 14% in September.
