Asian Stocks Down After U.S. Selloff, Treasury Bonds Drop
Asian stocks fell and Treasury bonds continued to slide at the open on Thursday after losses on Wall Street on concerns about the ballooning U.S. deficit.
Regional stock indexes fell for the first time in three days on weaker opens in Australia, Japan and South Korea. The dollar edged lower for a fourth straight session. U.S. stock futures were steady after the S&P 500 closed down 1.6% on Wednesday, its sharpest decline in a month. Treasury bonds fell across the board on Wednesday with longer-term debt bearing the brunt as the 30-year yield rose 12 basis points.
Weak demand for a $16 billion 20-year Treasury sale revived concerns about U.S. government borrowing and the budget deficit. That dampened sentiment after risk assets surged sharply over the past month and exposed structural concerns in the bond market.
"A weak 20-year Treasury auction fueled additional weakness," said Michael O'Rourke, chief market strategist at JonesTrading. "That's been the theme all week starting with the Moody's downgrade. Plus, there's the deficit/budget debate being fought in this environment."
Source: Bloomberg
