TOKYO - Bond yields climbed and stock markets held firm on Wednesday, as hopes of easing U.S.-China tensions and diminished risk of a no-deal Brexit prompted buying of out-of-favor value stocks before key central bank meetings.
Stock investors around the world sustained their rotation into value stocks, representing a major reversal after many months of outperformance by growth shares such as tech companies. On Wall Street, the S&P 500 ended little changed as a rally in energy and industrial shares countered a drop in the technology and real-estate sectors with investors favoring value over growth. [.N/C]
“Global bond markets are experiencing so-called momentum crashes,” said Masanari Takada, cross-asset strategist at Nomura Securities, referring to a sudden and dramatic change in the direction of asset prices.U.S. bond yields jumped on Wednesday, with the 10-year Treasuries yield rising more than 10 basis points to a one-month high of 1.745%.
Investors had bought bonds for many weeks on expectations that the ECB will dole out stimulus, with a cut in interest rates of at least 10 basis points fully priced in. Oil prices rose on Wednesday after an industry report showed that crude stockpiles in the United States fell last week by more than twice the amount that analysts had forecast. Prices hovered near their strongest in six weeks despite small losses on Tuesday after U.S. President Donald Trump fired national security adviser John Bolton.