Rising Bond Yields Pressure U.S. Equities

rtU.S. equity futures remain in the red on Tuesday as pressure builds in bond markets, causing investors to become increasingly more nervous about the resiliency of the economy with a possible interest rate hike looming in the second half of 2015.

The yield on the U.S. 10 year Treasury note rose to 2.36 to earlier this morning, marking the highest level since last November, which comes on the heels of a strong jobs report last Friday that increased expectations of an interest rate hike in late 2015, combined with short term concerns about an upcoming debt auction totaling $ 64 billion that the U.S. Treasury will be auctioning this week.

Over in the Europe, the yield on the German 10 year bund has increased 0.10 or 15.55 percent to .71 as bond traders sell German 10 year bunds amid concerns of rising inflation with oil prices rebounding and the ECB possibly adjusting the pace of quantitative easing bond purchases in the future if inflation continues to moves upward.

-John Schweitzer

 

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