Once again, the rise in government bond yields is acting as the catalyst for the sell off in stocks.
Stocks in Europe are up on the session as The People’s Bank of China cut the borrowing cost on 700-billion-yuan worth of one-year medium-term lending facility loans to 2.85%.
The hawkish tones from Federal Reserve members yesterday are still rippling through the markets today.
Volatility in the markets has drifted lower today as equities are trading within a relatively small range, and the currency market is calmer too. Equity markets in Europe are largely higher this afternoon as the rebound that began on Tuesday is still in play.
Traders are buying back into European equity markets as government bond yields are a little lower. At the start of the week, the US 10-year yield pushed above 1.80%, and that triggered a wave of selling in equities, in particular US stocks.
The mood in the markets is downbeat following the announcement of the disappointing headline US non-farm payrolls report.
Stocks are under pressure due to concerns the Federal Reserve might hike interest rates in the coming months.
The sell-off in the technology sector is holding back the US market. The relatively elevated US 10-year yield has dented the tech sector in the past 24 hours.
Stock markets are extending the impressive gains that were racked up last year as traders remain undeterred by the headlines about the rising number of omicron cases.
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