Global bonds face worst month in years as stocks hold steady
Global bonds were set for their worst month in years on Wednesday, driven by deteriorating government finances, heavy debt issuance, and rising inflation from the US-Israeli war on Iran, while stocks remained resilient. Benchmark 10-year US Treasury yields held near a 19-year high, poised for their largest monthly rise in about two years. Equity markets largely shrugged off the surge in bond yields, supported by robust earnings, global economic strength, and enthusiasm for artificial intelligence. Asian and European indexes rose, with US futures pointing firmer, though the dollar gained roughly 2% for the month on higher yields, pressuring the euro to a 16-month low. The STOXX 600 was set for a monthly loss of 1.4% but broadly unchanged for the quarter, while China's CSI 300 faced its steepest quarterly slump since COVID-19 lockdowns. Oil prices remained elevated on Middle East supply concerns, and gold added 0.44% to $4,199.28 an ounce.