LONDON (Reuters) – Global markets have been pummeled yet again on Wednesday as President Donald Trump’s eye-popping 104% tariffs on China took effect and a savage selloff in U.S. bonds sparked fears that foreign funds were fleeing U.S. assets.
Here is an overview of all the market news you need to start your day. Mike is off today, but check out his latest column to find out why the yuan is making analysts across Wall Street rip up their recently revised dollar forecasts.
Today’s Market Minute
* China’s top leaders plan to convene a meeting as early as Wednesday to discuss measures to boost the economy and stabilise capital markets, people with knowledge of the matter said.
* U.S. Treasuries extended heavy losses on Wednesday in a sign investors are dumping even their safest assets as a global market rout unleashed by U.S. tariffs takes an unnerving turn towards forced selling and a dash for the safety of cash.
* Taiwan Semiconductor Manufacturing could face a penalty of $1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei AI processor, according to two people familiar with the matter.
* China’s central bank has asked major state-owned banks to reduce U.S. dollar purchases, people with direct knowledge of the matter said on Wednesday.
* French industry minister Marc Ferracci on Wednesday urged French companies to suspend their investments in the United States, given clashes between France and Europe with U.S. President Donald Trump’s administration over tariffs.
It’s a ‘bond story’ now
This week has brought crisis-era volatility to markets, erasing trillions of dollars in value from stocks and hitting commodities and emerging markets with force.
At the epicentre of the latest rout are U.S. Treasuries, effectively the backbone of the global financial system. The benchmark U.S. 10-year yield rose by as much as 26 basis points to a high of 4.515% in Asia, before the selloff abated, leaving it up 7.7 bps at 4.34%.
“Last week was an equity story but as ever, it’s moved from an equity story to the more important bond story,” Chris Beauchamp, chief strategist at IG, said. “This is the financial plumbing and clearly, the plumbing has begun to seize up.”
Potentially adding to the pressure on Treasuries is an auction of new 10-year notes later on today that could prove a crucial litmus test of investor appetite for U.S. government debt.
Meanwhile, the yield on the 30-year Treasury briefly spiked above 5% before dropping back below 4.9%.
