Global market update: Losses expected across Asia, bond yields surge

© Reuters.

Investing.com - Asian markets are projected to begin Tuesday on a downward trajectory, despite modest gains in the U.S. stock market. This comes as global bond yields are experiencing a rapid increase.

Across Asia, KOSPI 200 Futures and Nikkei 225 Futures were indicating declines of 0.1% apiece while ASX 200 Futures added 0.4%. Overnight, U.S. markets experienced slight increases, with the Dow Jones, S&P 500, and Nasdaq rising by 0.1%, 0.4%, and 0.5% respectively at the close of trading in New York.

Major companies exhibited mixed performance in New York, with mining giants BHP Group Ltd (ASX:BHP)  and Rio Tinto Ltd (ASX:RIO)  experiencing a decline, while tech companies like Atlassian Corp (NASDAQ:TEAM), Tesla Inc (NASDAQ:TSLA), Apple Inc (NASDAQ:AAPL), and Amazon.com Inc (NASDAQ:AMZN) recorded gains.

In the currency landscape, the Australian dollar showed a marginal slide of 0.3%, the Thai Baht was flat, the Korean Won gained 0.1%, while Bitcoin was down by 0.6%

Among bonds, yields on U.S., Canadian, and U.K. 10-year notes saw significant increases, highlighting the global rise in bond yields.

Moody's, the credit ratings agency, warned that a potential U.S. government shutdown would negatively affect its credit assessment due to the exposed weakness in U.S. institutional and governance strength. However, they also noted that the economic impact would likely be short-lived.

The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), the largest long-dated bond ETF, is experiencing its biggest drawdown on record as the Federal Reserve’s interest rates continue to rise. Despite this, Ryan Detrick, a strategist at Carson Group, expressed optimism, suggesting that a rally in the fourth quarter is still possible.

In other news, Amazon plans to invest over $6 billion in AI startup, Anthropic. Meanwhile, Morgan Stanley’s Michael Wilson predicted that consumer stocks, which have been performing well this year, are likely to lose their lustre due to increasing risks in the sector.

Christine Lagarde, Europe's top central banker, stated that the European Central Bank rates would remain restrictive as long as necessary to ensure that inflation returns to their 2% medium-term target in a timely manner.

In the airline industry, Air France KLM SA (EPA:AIRF) has chosen Airbus SE’s A350 to renew its long-haul fleet. The company plans to order 50 of the Airbus A350-900 and the larger A350-1000 model, with deliveries expected to start in 2026.

In the commodities sector, investors are set to receive a $21.7 billion dividend windfall this week. However, shares of China Evergrande Group (HK:3333) took a hit, plunging 21.8% after the company announced that it was unable to issue new debt due to an ongoing investigation into one of its subsidiaries. This development has negatively impacted industrial metals, including iron ore.