SYDNEY : Asian shares slid on Monday as the mounting risk of more aggressive rate hikes in the United States and Europe shoved bond yields higher and tested equity and earnings valuations.
"The main takeaways are taming inflation is job number one for the Fed and the Funds Rate needs to get to a restrictive level of 3.5 per cent to 4.0 per cent," said Jason England, global bonds portfolio manager at Janus Henderson Investors. Much might depend on what the August payrolls figures show this Friday when analysts are looking for a moderate rise of 285,000 following July's blockbuster 528,000 gain.
Two-year U.S. yields were up at 3.44 per cent, far above the ten-year at 3.08 per cent. Yields climbed across Europe with double digit gains in Italy, Spain and Portugal. The euro was struggling at $0.9937, not far from last week's two-decade trough of $0.99005, while sterling slipped to a one-month low of $1.1686.