Global Yields Break Out After Japan PPI Jumps 2.3%, Pressuring Stocks and Lifting the Dollar
Updated
Updated · Investing.com · May 18
Global Yields Break Out After Japan PPI Jumps 2.3%, Pressuring Stocks and Lifting the Dollar
5 articles · Updated · Investing.com · May 18
Japan’s 2.3% monthly PPI surge—versus 0.8% expected—helped trigger a global bond selloff Friday, sending stocks sharply lower as markets priced more rate hikes.
The 30-year JGB yield jumped 16 basis points to 4.08%, narrowing its spread with the US 30-year Treasury to 1.04%; Germany’s 10-year yield also hit its highest level since 2011.
Rate markets now imply two to three hikes this year from most major central banks outside the US, with traders also assigning some chance of a Fed hike before year-end.
The stronger yield backdrop pushed the dollar out of a bull-flag pattern toward the 100-100.5 area, while the Italy-Germany 10-year spread widened to 77 basis points and neared a possible breakout.
For equities, a break below the S&P 500’s 10-day EMA near 7,350 for several days would signal a trend shift, with NVIDIA’s May 22 earnings seen as a potential catalyst for a broader sell-the-news unwind.
With Japan's inflation awakening, is the era of ultra-low global interest rates officially over?
Caught between inflation and credit risks, which threat will force the Federal Reserve's hand first?
Will NVIDIA's pivotal earnings defy the market's downturn, or trigger a broader tech sector collapse?