London — World stocks headed back towards record highs with a third day of gains and the dollar dropped to a three-year low on Thursday, after top US Federal Reserve and European Central Bank officials took aim at rising bond market yields.
“There are two clear stories now,” said CMC Markets senior analyst Michael Hewson. “You have the concerns about rising yields and they are continuing to move higher today, and then you have got an economic recovery story, which is helping lift the more moderately valued parts of the market.” But bond markets are still not playing ball. Ten-year German bund yields climbed three basis points in early trading. US 10-year treasury yields were near one-year highs at 1.42% and on course for the biggest monthly rise since Donald Trump’s 2016 US election victory jolted markets.
“It is clear that there is a pretty strong concentration in the commodity currencies,” said Saxo Bank’s John Hardy. “Even with emerging markets you are seeing it to a degree,” he added, pointing to how big energy importers such as Turkey’s lira had faded.Crude oil climbed to 13-month highs after US government data on Wednesday showed a drop in crude output as a deep freeze in Texas disrupted production last week.