Bond rally continues as Dow futures collapse 500 points and European stocks retreat – .

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Bond rally continues as Dow futures collapse 500 points and European stocks retreat – .


Equities in Europe slumped Thursday as bonds continued to rally, as investors assessed central bank developments and anticipated the economy’s behavior next year without as many stimulus measures.

After falling nearly 5 basis points on Wednesday, the yield on the 10-year US Treasury bill TMUBMUSD10Y,
1,258 %
fell to 1.25%. The yield of the US 30 years TMUBMUSD30Y,
1,866%,
which fell to the lowest level since February 10 on Wednesday, fell to 1.89%.

The yield of the German 10-year Bund TMBMKDE-10Y,
-0,332%

fell to -0.34%. Yields move in the opposite direction to prices.

“The main message sent by the bond market seems to be that investors believe future inflation is likely to become more subdued and future growth more subdued, which means that monetary policy will not have to tighten as much for this. keep a lid on pricing pressures, ”said Michael Brown, senior market analyst at Caxton FX.

The Stoxx Europe 600 SXXP,
-1,74%
fell 1.8% after closing Wednesday at its second-highest level on record. Minors including Rio Tinto RIO,
-3,49%
and banks including HSBC Holdings HSBA,
-2,15%
drives the slowdown.

US ES00 equity futures contracts,
-1,25%

NQ00,
-1,14%
also slipped, with the Dow YM00 contract,
-1,34 %
lose more than 500 points.

It was the first opportunity for foreign investors to respond to the dying minutes of the US Federal Open Market Committee, which showed division over the timing of the bond purchase rate cut. This came as no surprise as officials expressed their disparate views in public.

The European Central Bank will announce the results of its strategy review, in which the central bank is expected to move from an inflation target below but close to 2% to a symmetrical target of 2%, which is in line with other central banks. . The announcement is set for 1:00 p.m. local time, or 7:00 a.m. Eastern Time, followed by a press conference with ECB President Christine Lagarde.

“In practice, it won’t make a major difference in our opinion, because the majority of the board members have probably aimed for this anyway,” said Holger Schmieding, chief economist at Berenberg. He thought the press conference could change the markets. “This could say more about the current balance between hawks and doves on the board,” he said.

Fears over the delta variant of the coronavirus were exacerbated by news that Tokyo was extending the state of emergency, effectively excluding spectators from the Olympics.

TeamViewer TMV software editor,
-14,67 %
was the worst performer of the Stoxx 600, losing 15% after saying its second quarter billings would be below target.

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