Stocks wobble as bonds slump to monthly loss

Business Recorder reported that higher oil prices and rising bond yields weighed on Asian equities on Tuesday, as investors braced for a rate increase in Australia. US 10-year Treasury yields jumped to a 19-year peak above 5.27%, adding close to 50 basis points through September. Bond prices fell, producing the heaviest monthly selloff in two years.

The two-year US yield rose more than 57 basis points this month, nearing 5%, as traders expected the Federal Reserve to lift rates three more times by mid next year. Sovereign yields act as a reference for riskier assets and set the cost of mortgages and corporate loans, so higher levels place strain on the finances of governments, companies and households. In Asia, bond markets in Japan, South Korea and Australia came under pressure and most regional equity markets declined.

Brent crude futures stood at $106.60 a barrel and were still climbing, as Middle East developments offered no hint of a breakthrough. Elsewhere, the blue chip CSI300 index in China remained close to a one-year low, while the yen was near 157.31 against the dollar. Business Recorder noted that Westpac strategists questioned whether the Reserve Bank of Australia governor could sound hawkish enough to match market expectations.