Risk assets slid Thursday as China's second interest-rate cut in a week sparked concerns of instability in the world's second-largest economy.In equity markets, Germany's DAX, France's CAC and the eurozone's Euro Stoxx 50 fell over 1.5%, and futures tied to the tech-heavy Nasdaq 100 were slightly lower after the index's 3% slide on Wednesday, according to data sourcein its one-year medium-term lending facility rate to 2.3% from 2.
"Equity futures are stable after yesterday's bloody session that shook views across all asset classes," Ilan Solot, senior global strategist at Marex Solutions, said in a note shared with CoinDesk."The decision by the PBoC to cut rates in a surprise move only added to the sense of panic." Marex Solutions, a division of global financial platform Marex, specializes in creating and distributing customized derivatives products and issuing crypto-linked structured products.
The yield curve steepens when the difference between longer-duration and shorter-duration bond yields increases. This month, the spread between 10-year and two-year Treasury yields has risen by 20 basis points to -0.12 basis points , mainly due to stickier 10-year yields. "For me, the biggest concern is the shape of the U.S. yield curve, which continues steepening. The 2- and 10-year curve is not only -12bps inverted, compared to -50bps just last month. The recent moves have been led by rising back-end yields and falling short-end ones," Solot said.
That's a sign markets expect the Fed to cut rates but see stickier inflation and expansionary fiscal policy as growing risks, Solot said.in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.