Fears about falling bond prices that dominated the market receded on Monday, with European stocks and US futures rising with falling bond yields.
The rise in bond yields hit the stock markets last week, with the high-tech Nasdaq Composite COMP,
losing almost 5%. The increase in yields makes the relative appreciation of the shares appear worse. Yields move in the opposite direction to prices.
The yield of the 10-year US Treasury TMUBMUSD10Y,
was 1.43%, compared to an increase of 1.55% in the previous week.
The Reserve Bank of Australia doubled its daily bond purchases to A $ 4 billion, sending yields on the 10-year Aussie TMBMKAU-10Y,
noticeably lower. Comments by Federal Reserve officials last week suggested a lack of appetite to increase purchases of US government bonds.
“I have little doubt that central banks will end up putting a lot of effort into a sustained increase in yields. They simply cannot afford to see this happen with such a high debt, ”said Jim Reid, strategist at Deutsche Bank. “So far, however, Fed officials are very relaxed about the recent moves, suggesting that this reflects more positive economic growth. But as everything happened so fast last week, they will have a chance to regroup and align their message for this week. “
Relief in forward rates boosted inventories, with Stoxx Europe 600 SXXP,
gaining 1.6% after a rise in Asian NIK stocks,
during the night.
Futures at the Dow Jones Industrial Average YM00,
rose more than 300 points.
UK home builders have taken a leap forward, with reports that the government will subsidize mortgages with a 5% down payment, a move designed to encourage home ownership in a country with an average home price of £ 251,500 and £ 496,066 in London . Persimmon PSN,
rose 6% and Taylor Wimpey TW,
added 5%.
UK Chancellor Rishi Sunak delivers the budget on Wednesday.