European markets lose momentum amid rising U.S. bond yields
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LONDON — European stocks are expected to open lower on Wednesday as global markets react to rising U.S. bond yields.
The U.K. FTSEIndex opens 25 points lower than 7,472, Germany. DAX 24 points lower at 16,110, France’s CAC 40 down 10 points at 7,299 and Italy’s FTSE MIBData from IG shows that the number of points was 16.
European markets should follow. the broadly negative trend set in Asia-PacificOvernight, investors closely watch interest rates in bond markets to ensure they are not affected by them. U.S. Treasury yields rising at the fastest new year pace in two decades. The 10-year U.S. Treasury benchmark yield rose as much as 1.71% Tuesday. Last week, it was at 1.6455%.
Important is the 10-year yield since it influences lending rates for mortgages and many other business and consumer loans. If bonds go under, the yields (or interest rates) rise.
Investors await the publication of minutes from the December Federal Reserve meeting. It announced that the Federal Reserve would accelerate tapering its bond-buying program, and it also predicted three more interest rate rises in 2022.
Meanwhile, U.S. stock futures were flat in overnight tradingTuesday was a record-breaking day for the Dow Jones Industrial Average as investors flock to share that could benefit from an economic recovery.
Wednesday’s data release in Europe includes final PMI data (purchasing managers index) and data about December in the euro zone’s manufacturing, services and industrial sectors. Also available: December consumer confidence data.
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— CNBC’s Yun Li, Patti Domm and Eustance Huang contributed to this market report.
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