GLOBAL MARKETS-Bond yields rise worldwide on stimulus concerns; earnings loom

By Reuters / July 24, 2018 / in.investing.com / Article Link

* Bond yields spike; BoJ may scale back stimulus

* U.S. curve steepens further as dollar nudged off two-week lows

* Stocks rise ahead of major earnings

* Oil volatile on U.S.-Iran row, and gold loses more luster (Updates to early afternoon with oil price declines, U.S. stock gains)

By Trevor Hunnicutt

NEW YORK, July 23 (Reuters) - Fears that monetary policymakers in the U.S. and Japan will scale back support for the economy sent quivers through debt markets on Monday, while U.S. stocks gained ahead of major company earnings reports.

Bond yields climbed as the Federal Reserve was seen as likely to continue raising interest rates despite criticism from U.S. President Donald Trump and after a Reuters report that the Bank of Japan (BoJ) was discussing modifying its huge stimulus program sent Japan's 10-year bond yield to a six-month high. report rekindled anxieties about how much monetary policymakers will continue supporting economies around the world and piled further pressure on investors already struggling to navigate rising protectionism.

U.S. 10-year Treasury yields US10YT=RR hit their highest in a month and traded at 2.9597 percent, following a rise in Europe's benchmark 10-year German Bund DE10Y=TT . all that concern investors have about the move from global quantitative easing to global quantitative tightening. That fear gets stoked when you have reports such as this," said Rory McPherson, Psigma Investment Management's head of investment strategy.

Sage Advisory Services Ltd Chief Investment Officer Bob Smith said there is no "800-pound gorilla" willing to absorb an increasing supply of bonds. The U.S. has several bond auctions scheduled this week.

"You're sitting right in the dead of summer," he said.

"I don't think the super-heroes are on the trading desks right now. They're probably on the beach."

The dollar index .DXY rose 0.14 percent off two-week lows it hit after Trump criticized the Federal Reserve's rate hikes and accused the European Union and China of manipulating their currencies. said it has no intention of devaluing the yuan to help exports. see the latest news on trade policy as pointing to continued high risk of escalation between the U.S. and China, and a renewed focus of the Trump Administration on currency matters," Goldman Sachs (NYSE:GS) analysts said.

Trump's warnings about excessive interest rate hikes last week also widened the gap between short and long-term Treasury yields. That "steepening" of the yield curve continued on Monday, with yields on 30-year Treasuries more than 0.46 percentage points higher than their 2-year counterparts, the biggest gap in nearly a month. US2US30=TWEB

Short-end yields are influenced by U.S. monetary policy, and longer-term government bonds are driven by more by inflation and growth expectations. A shrinking gap between yields this year has been seen as a possible sign of a coming recession.

U.S. STOCKS MANAGE GAINS

Trump's threats to slap duties on all $500 billion of U.S. imports from China triggered selloffs across global stock markets that hit market-leading technology names, such as Amazon.com Inc AMZN.O .

Yet U.S. equities largely dodged threats of further American tariffs on China, rising ahead of potentially blockbuster earnings. Financials stand to benefit from a steeper curve because they borrow at short-term rates and lend over longer time periods.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.03 percent, with stocks broadly lower across Europe, Asia and emerging markets.

The Dow Jones Industrial Average .DJI rose 7.93 points, or 0.03 percent, to 25,066.05, the S&P 500 .SPX gained 4.37 points, or 0.16 percent, to 2,806.2 and the Nasdaq Composite .IXIC added 13.53 points, or 0.17 percent, to 7,833.73. are bracing for a packed earnings week, including results from Google parent Alphabet GOOGL.O , and a meeting between European Commission President Jean-Claude Juncker and Trump to discuss threatened tariffs.

OIL PRICES SWING

Oil lost strong early gains on U.S.-Iran tensions after traders weighed the risk that Saudi Arabia and other large producers could ramp up production ahead of a November deadline for other countries to comply with U.S. sanctions on Iranian crude sales. crude CLcv1 fell 0.76 percent to $67.74 per barrel and Brent LCOcv1 was last at $72.69, down 0.52 percent.

In metals, both copper and gold neared one-year lows. Copper CMCU3 - among the most sensitive to trade tensions - lost 0.16 percent, trading at $6,137.50 a tonne.

Spot gold, hit by a strong greenback that makes the metal priced in dollars more expensive to foreign buyers, dropped 0.6 percent to $1,224.01 an ounce. XAU= Japanese bond yields jump to 6-month high

https://reut.rs/2LgVPjJ GRAPHIC-Global assets in 2018

http://tmsnrt.rs/2jvdmXl GRAPHIC-Emerging markets in 2018

http://tmsnrt.rs/2ihRugV GRAPHIC-World FX rates in 2018

http://tmsnrt.rs/2egbfVh GRAPHIC-MSCI All Country World Index Market Cap

http://tmsnrt.rs/2EmTD6j

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