Daily summary: Global equities under pressure amid surging bond yields

8:01 PM February 25, 2021
  • The 10-year U.S. Treasury yield briefly topped the 1.6% level 
  • Technology sector under pressure
  • Upbeat economy data from the US

Most of European indices erased early gains and finished today's session lower as a surge in bond yields prompted investors to dump risk assets. DAX 30 experienced the strongest losses mainly due to a sharp sell-off of Bayer shares. The pharmaceutical giant said net profit for the period fell by around 78% to 308 million euros ($374.9 million) from EUR1.41 billion a year earlier. On the data front, the GfK consumer confidence for Germany came in above expectations and the Eurozone economic sentiment jumped  to an 11-month high.

US indices remain under pressure as surging bond yields reached fresh 1-year highs at 1.6% despite recent dovish comments from Fed Chair Powell. The move higher in yields put the benchmark rate above the S&P 500′s dividend yield, reducing the relative appeal of equities, which are already considered riskier assets. Higher yields completely overshadowed strong economic data  from the US which pointed to a sustainable economic recovery. Weekly jobless claims fell to a 3-month low of 730K, GDP growth for Q4 was revised higher to 4.1% and durable goods orders reached the highest levels in 6 months.

WTI crude fell more than 0.4% and is trading slightly below $63.00 a barrel, while Brent is trading 0.70%  lower around $66.50 a barrel. Elsewhere gold plunged more than 2% to $ 1,765.00 / oz, while silver is trading 1.8 % lower near $ 27.47 / oz due to surging Treasury yields.

Gold fell sharply today, however sellers failed to break below the key support at $1765.00 on the first attempt and price tested local resistance at $1778.00. However, if sellers will manage to regain control and bring the price below the aforementioned support, the way towards $1751.00 will be opened. Source: xStation5

Share:
Back

Trading CFDs on a leveraged basis involves a significant amount of risk. They may not be suitable for everyone, so please ensure you fully understand all of the risks.

Forex and CFDs are leveraged products and can result in losses that exceed your deposits. Please ensure you fully understand all of the risks.

Losses can exceed deposits