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    MORNING BELL: Bond rout roils markets

    Crude oil prices gained in early Asia on Wednesday after a sharp drop in industry estimates of U.S. stocks, but a fall in gasoline inventories is well ahead of the summer driving season. On the New York Mercantile Exchange, WTI crude for June delivery jumped 1.07%, to $61.46 a barrel. On the Intercontinental Exchange (ICE), Brent crude for June delivery surged 1.95 or 3.00%, to 66.86 a barrel on Tuesday.

    In Europe, yields on 10-Year German bonds soared more than a dozen basis points to 0.73%, extending Monday's sell-off when they rose six basis points from 0.54 to 0.60. Despite ending Tuesday's session slightly lower at 0.68%, the yields still moved more than 14% on the day. Yields on government debt increase when bond prices decrease. The Dow Jones industrial average fell 36.94 points, or 0.2 percent, to end at 18,068.23. The S&P 500 lost 6.21 points, or 0.29 percent, to finish at 2,099.12 and the Nasdaq Composite dropped 17.38 points, or 0.35 percent, to 4,976.19.

    The Dollar Index last traded at 94.561, having shed 0.5 percent on Tuesday. The greenback dipped to 119.87 yen, from Tuesday's high of 120.28. Still, it remained stuck in a 118.500-120.845 range, seen since April. The euro climbed to $1.1216 from $1.1134, but was well short of retesting a two-month peak of $1.1392 set last week. Sterling was one of the best performing major currencies overnight, rallying as far as $1.5710, a high last seen in mid-December, before settling at $1.5668 early in Asia. Official data showed British industrial output grew at its fastest rate in six months in March after an unexpected bounce in oil and gas extraction, easing fears that economic growth is starting to slow. In contrast, U.S. retail sales are expected to rise a mere 0.2 percent in April, slowing from a 0.9 percent jump in March. 

    Gold futures rose significantly on Tuesday, as the global bond sell-off continued to rattle markets pushing the euro up sharply against the dollar. Elsewhere, silver for July delivery soared 0.224 or 1.40%, to 16.538 an ounce. Copper for July delivery gained 0.025 or 0.87%, to 2.928 a pound.

     

     

     


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