LRS SP forecast target by end 2021, page-44

Yep looks like another tough day across the board for today. Lots of uncertainty right now.

Equities tumble as surging yields bite

Alex Gluyas

Global sharemarkets plunged overnight as surging bond yields revealed markets are still coming to terms with the hawkish tilt from the Federal Reserve and Bank of England last week, according to National Australia Bank.

Since last Wednesday’s FOMC meeting, US 10-year yields have risen 22 basis points, having climbed 5 basis points overnight to 1.54 per cent – a level not seen since June.

Strategists said the ongoing angst regarding the US debt ceiling and the unfolding energy crisis which is sparking fears about higher inflation are also concerning markets.

“The debt ceiling debacle in the US has finally risen to the fore as a major risk for the markets,” said a market analyst at IG, Kyle Rodda.

“The Congressional Democrats and Republicans appear miles apart on agreeing to lift the limit, amid warnings from US Treasury secretary Janet Yellen and US Fed chairperson Jerome Powell in testimonies before congress overnight of the devastating impact of an effective default on US debt, which would see the Treasury run out of cash by October 18.”

NAB economists also noted an “unusual amount of uncertainty” surrounding the US Federal Reserve following the resignation of regional presidents Kaplan and Rosengren, as well as uncertainty about whether chairman Powell will get a second term.