Bonds in Focus as Yields Rise

U.S. stocks are weaker as investors focus on the rise in bond yields here in the U.S. and in Europe.

Nomura's Charlotte Dendy notes 10yr Gilts and US Treasuries cheapened with yields up 7bp and 3bp respectively. Bunds are particularly in the limelight after Mario Draghi’s comments yesterday. They continued to sell-off over the morning with yields up 6bp. OAT yields were up 8bp. Peripherals continued the trend but less sharply with yields up around 3-5bp for Italy, Spain and Portugal. The dollar weakened against all regional currencies, EURUSD and GBPUSD were up 0.8% and 0.6% respectively on the day.

No agreement on Greece was reached at the Tsipras/Juncker meeting yesterday. Alexis Tsipras stuck to his position that any basis for an accord must be a Greek proposal. He said the plan should avoid spending cuts and tax increases, rather than what had been drawn up in recent days by creditors.

Dow futures are down 72, S&P 500 futures are down 10 and Nasdaq futures are down 30.

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