Morning Bid Europe-The dog days are over

Stocks were down in Seoul, Tokyo, Sydney and Hong Kong, where shares in fashion giant Shein Global 0625.HK fell 8% in their first day of trading after an initial public offering that was already discounted on growth and regulatory challenges.

Some investors have noted that much of the rise in global bond yields is driven by real yields going up, or in other words better growth expectations — so maybe not such bad news for stocks after all.

But there's also a worrying rise in term premia. By one measure, published by the New York Fed, the 10-year Treasury term premium had more than tripled from around 26 basis points in January 2025 to more than 80 bps in June.

Since the end of June, nominal 10-year Treasury yields have risen about 36 basis points against a 9 bp rise in breakeven inflation expectations, suggesting some mixture of rises in term premium and real yield.

Key developments that could influence markets on Tuesday: