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Global bond markets rebounded, with the US 10-year yield sliding to 4.8%, amid growing speculation that the recent selloff was excessive. Nasdaq 100 index futures rose ahead of earnings from Microsoft Corp and Alphabet Inc.
Treasury 10-year yields slipped as much as five basis points to a one-week low after reaching the highest since 2007. Europe’s Stoxx 600 index traded little changed, while US futures added 0.4%. Bitcoin topped $35,000 and the euro swung to a loss against the dollar as data showed the French and German economies struggling.
Treasuries are recovering after some of the market’s most prominent bears warned of an economic slowdown, stoking bets the declines have overshot and that the Federal Reserve will need to lower interest rates. Wild swings in government debt are unsettling investors as a resilient economy makes it hard to work out when the Fed will halt rate hikes. Surging government issuance and geopolitical tensions are also clouding the outlook.
“I don’t think you should be pounding the table saying this is the absolute best time to buy,” said Patrick Armstrong, chief investment officer at Plurimi Wealth LLP. “But I would not be shorting.”
Brent crude snapped two days of losses to climb above $90 per barrel. There are growing calls in Israel to rethink the scope of any ground invasion of Gaza as talks to free hostages taken by Hamas intensified and French President Emmanuel Macron becomes the latest world leader to visit.
Separately, Bitcoin hit the highest level since May last year as the possible approval in the coming weeks of the first US spot Bitcoin ETFs stoked appetite for the token. Asset managers BlackRock Inc and Fidelity Investments are among those in the race to offer such products.
In Asia, most Chinese stock gauges rose after the nation’s sovereign wealth fund bought exchange-traded funds to shore up prices. Stocks in the region were mixed, with markets in Japan and South Korea reversing declines of more than 1% to trade higher.
The rebound in Chinese equities “shows that while it may still be too early to call a bottom, the authorities are making it a rule to step on the brakes whenever there looks like there’s overwhelming downward momentum,” said Raymond Chen, fund manager at Zizhou Investment Asset Management.