A global bond selloff deepened and oil prices held above $91 a barrel in early European trade.
Investors are doubling down on bets for an extended closure in the Strait of Hormuz amid no advances in peace talks, while Iran-backed Houthi rebels escalated attacks on shipping along the Red Sea coast.
The prospect of higher-for-longer oil prices added to sustained upward pressure on borrowing costs. U.S. 10-year Treasury yields hit their highest level since January 2025 in early European morning, after Japanese 10-year yields jumped to levels not seen since 1996. Meanwhile, German 10-year yields hit a 15-year high.
Momentum in U.S. chip stocks Monday stalled in Asian trade, where tech-heavy indexes fell. Losses for the sector extended into European trade, while Nasdaq futures also pointed lower.
For the day ahead, U.S. industrial production and housing starts data for July are among key releases.
--The 30-year U.S. Treasury yield extended its recent rise, climbing to 5.326%, the highest level since 2007, according to Tradeweb data. The 10-year yield also rises, hitting 4.742% in Asian trade, the highest level since end-July. Drivers include investor concerns over U.S. government spending as well as a lack of progress toward a resolution in the Middle East.
--The German 10-year Bund yield rose to a 15-year high of 3.249% in opening trade. In the U.K., 30-year gilt yields hit a 3-month high of 5.848%.
--Brent crude oil rose 0.1% to $91.04 a barrel, while WTI futures gained 0.5% to $84.95 a barrel. "President Trump indicated little interest in extending the expired agreement with Iran, while major differences remain over Hormuz," says Soojin Kim from MUFG. Meanwhile, shipping security risks remain. Yemen's Iranian-allied Houthi rebels are escalating attacks along the country's Red Sea coast, pushing closer to the key Bab al-Mandeb Strait.
--In the U.S., futures for the Dow Jones Industrial Average slipped 0.2% and S&P 500 fell 0.5%. Nasdaq futures were 0.9% lower. Chip stocks were on track to open lower, with Micron Technology and Applied Materials dropping 3.5% and 3.1%, respectively, premarket.
--Asian equity markets mostly fell, Japan's Nikkei Stock Average was down 2.5%, Hong Kong's Hang Seng Index was 0.1% higher and Taiwan's Taiex fell 1.2%. In South Korea, the Kospi dropped 1.55%.
--European stock indexes largely slipped as higher oil prices and borrowing costs weighed. Technology and industrial stocks fell as the continent-wide Stoxx Europe 600 slipped 0.3%. Germany's DAX was down 0.35%, dragged by a 2.4% fall for chip maker Infineon Technologies. Industrial giant Siemens lost 0.9%. The CAC 40 fell 0.2% in Paris, where STMicroelectronics slid 3.1% while Schneider Electric dropped 1%. In Amsterdam, the AEX fell 0.2% as ASML dropped 1.5%. Italy's FTSE MIB was 0.45% lower. Oil majors BP and Repsol added 1.9% and 1.2%, respectively, supporting indexes in London and Madrid. Both the FTSE 100 and IBEX 35 edged up 0.1%.
--The dollar recovered slightly as oil prices rose. The recent scaling back of rate-rise bets sent the DXY dollar index to a 10-week low of 99.294 Monday. The index was last up 0.1% at 99.673.
--Bitcoin fell 0.2% to $64,261. The cryptocurrency held above $64,000 despite geopolitical pressure, exchange-traded fund outflows and crypto regulatory uncertainty signals improving resilience, although it doesn't yet prove institutional demand has fully returned, Zaye Capital Markets analyst Naeem Aslam said in a note.
--Gold prices slipped, pressured by higher oil prices and higher U.S. Treasury yields, which increase the opportunity cost of holding nonyielding bullion. In early European trading, New York futures were down 0.4% to $4,455.30 a troy ounce. Still, prices have risen more than 10% on the month. "Gold has nevertheless remained supported by renewed investor demand and stronger central-bank purchases, particularly from China," analysts at MUFG said.
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