World stocks recovered ground on Wednesday as markets watched for signs of light in the Ukraine conflict, while Treasury yields reached their highest since mid-2019 in anticipation of the first US interest rate hike in three years.
“These sanctions probably are working, hopefully that will put some pressure on both sides to get around the table and negotiate,” Gregory Perdon, co-CIOat Arbuthnot Latham, said. The invasion could dampen the pace of Fed rate hikes he added. The MSCI world equity index rose 0.87%, moving away from one-year lows in the previous session. S&P futures gained 0.79% after US stocks enjoyed a relief rally overnight on Wall Street, driven by hopes of a resolution in Ukraine.
US 10-year Treasury yields rose to 2.204% on the Fed rate hike hopes, their highest since June 2019. The five-year yield rose to 2.149%, its highest since May 2019.Russia has $117.2m in interest payments due on two dollar-denominated Eurobonds on Wednesday. Its finance ministry has said it will make the payments in roubles if sanctions prevent it from paying in dollars — a move markets would view as a default.