Global markets-Bond selloff slows but stocks sink

The risk-averse mood has lent a little support to an otherwise softening dollar in currency markets, though moves were small. FRX/ The Canadian dollar CAD= rose a tad after U.S. President Donald Trump paused imposing a 50% tariff on Canadian goods for three days, saying the countries had reached a deal. CAD/ The euro EUR= hovered at $1.1586 and the yen JPY= traded at 159.23 per dollar, just in the shadow of 160 - a level investors see as a potential trigger for another round of official intervention. European and British inflation data on Wednesday is due along with earnings at Lowe's LOW.N, Target TGT.N and TJX TJX.N which will be closely watched after softer-than-expected U.S. retail sales data landed last week. Home Depot HD.N beat estimates for second-quarter sales and profit on Tuesday, on strong demand from customers for repair and maintenance, though U.S. data showed homebuilding dived in July, hit hard by rising mortgage rates. ($1 = 1.4128 Australian dollars) Global bond yields hovered near their highest for decades on Wednesday, as fears over swelling sovereign debt pushed borrowing costs higher and rattled stock markets worldwide. U.S. ESc1 and European STXEc1 stock futures wobbled about 0.2% lower in the Asia session. Japan's Nikkei .N225 fell 3.3% and South Korea's KOSPI .KS11 slid nearly 6%, as selling in semiconductor stocks spilled over from Wall Street. The yield on the U.S. long bond US30YT=RR steadied around 5.27% after hitting its highest in nearly 20 years on Tuesday, at 5.3371%. German FGBLc1 and French FOATc1 debt futures were likewise stable after a selloff that took German 10-year and 30-year yields to their highest since 2011 and has lifted French 30-year yields by nearly 50 basis points since June. Yields go up when bond prices go down and the selloff matters because long-end sovereign yields act as an anchor for the price of nearly every other asset in financial markets and are an important benchmark for mortgage rates. "Whether it's property or equities or infrastructure, if you get a meaningful (bond) sell-off, then possibly that becomes a bit challenging for some of those asset classes," said National Australia Bank's chief economist Sally Auld. The climb of Japan's benchmark 10-year sovereign yield JP10YTN=JBTC toward 3% is also a warning sign for global debt markets that for years have depended on low Japanese rates driving a constant flow of Japanese investment abroad. The inflation outlook also remains troubling with Brent crude futures LCOc1 parked above $90 a barrel on no signs of progress toward a deal to open the Strait of Hormuz. Debt demand is also being stretched by skyrocketing sales by AI hyperscalers. Alphabet, Google's parent, is the latest example, reportedly seeking about A$5 billion ($3.5 billion) through an Australian-dollar bond sale, Bloomberg News reported. Later on Wednesday the U.S. Federal Reserve releases minutes from the July meeting where it left rates on hold, but Chair Kevin Warsh spooked markets by offering few clues about whether and how the central bank might respond to persistent inflation. The U.S. is also set to sell $16 billion in 20-year debt. "Investors are no longer taking on faith that (government) spending gets brought under control. Indeed, they're pricing the risk that it doesn't," said Nigel Green, CEO of financial advisory deVere Group. "Governments face a real choice between spending discipline and materially higher borrowing costs, and markets will keep testing which one they choose." In China, shares in the world's biggest humanoid-robot maker, Unitree 688836.SS, soared 600% on debut, a listing that was more than 8,000 times oversubscribed by retail investors, though the rest of the market tracked the dour global mood. The bond selloff and reports that Anthropic's annual revenue run-rate topped $65 billion at the end of July, which was behind some market hopes, were triggers for selling chipmaking shares.

Global markets-Bond selloff slows but stocks sink

Currencies and earnings watch

Bond selloff keeps yields near multi-decade highs

Japan yields, oil and AI debt sales add to pressure

Stocks wobble as chip shares and regional markets slide

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