The late sell-off in US stocks yesterday has not prevented gains in Asia and Europe. Most of the equity markets, including the re-opening of China, gain more than 1%. Australia was a notable exception, falling about 0.4%, and Taiwan was virtually flat. European bourses opened higher but made little headway before some profit-taking set in, while US shares are trading higher.
Benchmark 10-year yields are firmer, and the US Treasury yield is near 67 bp and is approaching the upper end of its recent range. The yield has not closed above here since April 14. Despite the German court ruling yesterday, peripheral European bonds are not under pressure, and in fact, the Italian premium has narrowed a little. The dollar remains firm against most of the major currencies. The is resilient and Japanese markets re-open tomorrow. The dollar bloc is little changed, but the euro and sterling are under heavy.
The slipped below $1.08 in the European morning, and was sold below…