U.S. and European borrowing costs rose in many countries, global stocks face “colonial interest rate panic”

U.S. bond interest rates rising worries again, the global stock market setbacks in the fourth day of trading. Experts warned that the bond yield rate climbing worries will linger, the future stock market may face more “colonial interest rate panic”.

The U.S. 10-year bond yield rate climbed again in the 4th session, rising to a maximum of 1.458%, and triggered other countries’ bond yield rate climbing, such as the U.K. 10-year bond yield rate jumped to 0.779%, approaching last week’s 11-month high, again triggering investors’ worries. The U.S. has a much higher chance of passing a new stimulus package, coupled with significant progress in vaccination for the new crown, driving the benchmark 10-year U.S. bond yield to 1.614% last week, a one-year high.

The MSCI AC World Index, which tracks the stock markets of 49 countries, fell 0.6% for the third consecutive day, while the three major U.S. stock indices were flat and major European stock markets were lower, with Asian stocks falling more than 1%. The market turned to focus on the Federal Reserve Board (Fed) Chairman Ball scheduled to talk at 1:00 a.m. Taipei Time on the 5th, he is expected to reaffirm the Fed’s position of not rushing to raise interest rates to ease market doubts.

FactSet data shows that the S&P 500’s cost-benefit ratio is about 22 times, close to the most in 20 years; in December 2009 (six months after the end of the last recession), the S&P 500’s cost-benefit ratio was about 14 times. Therefore, even a relatively moderate rise in U.S. bond yield and an increase in the relative attractiveness of bonds could trigger stock market volatility.

Investors are waiting for the Fed’s stance on rising colonial interest rates. Daiwa Securities chief global strategist wall Valley and said it is not clear how the Fed hopes to deal with the issue of bond interest rates, “the speed of the rise in colonial interest rates far more than most people expected, and some speculate that the authorities may begin to consider tightening policy.

The rise in bond interest rates also made The Japanese yen, the Swiss franc and Gold and other safe assets suffered a setback, the yen fell to a seven-month trough against the dollar on the 4th, at 107.16 yen, the Swiss franc also fell to a four-month low against the dollar. The spot price of gold fell to a nine-month low of $1,702.8 per British tael.