While those concerns have been the catalyst for recent selling, the retreat in equities had been long awaited by investors as the market climbed nearly steadily to record highs earlier this year.
Stocks closed lower Wednesday, but not before swinging wildly to sharply higher and lower levels, as interest rates rose.
Indian bond yields opened lower at 7.53, lower by 7bps than its previous close, tracking USA bond yields and fall in the domestic markets. Two weeks later, another billionaire, Ray Dalio of hedge fund firm Bridgewater Associates, piled on with a forecast of the worst bear market since the early 1980s.
A close look at the last 20 years of performance history uncovers the domestic utility and real estate sectors as the most sensitive to interest rate changes, and thus they are the most at risk from rising interest rates and bond yields. Brent futures fell $2.02 a barrel, or 3.1 percent, to $62.79 a barrel, its lowest settlement since December 13.
In the bond market, the focus is on equities, but also on this week's auctions.
Concerns about higher bond yields and interest rates spurred recent selling of equities, disrupting an extended advance in stocks, though the retreat in the US market had been long awaited by investors. "The higher yields go, the more competition there will be for equity income investing".
Bond yields across the bloc fell 5 to 6 basis points, after rising to multi-year highs in recent sessions on expectations strong growth and a pick-up in inflation would encourage central banks to pull away from ultra-easy monetary policies.
"If 2.88 scared people why would they be comfortable with 2.84/2.85", said Schumacher.
US 10-year Treasuries dropped, pushing the yield to a four-year high, as United Kingdom gilts sold off.
"You could get into a little bit of circular logic here, as you hand leadership back and forth".
Investor concerns over inflation was reflected in Lipper funds data on Thursday, which showed USA -based inflation-protected bond funds attracted $859 million over the weekly period, the largest inflows since November 2016.
"There's going to be an interplay, a bit of push and pull between the rates market and equity market", said Mark Cabana, head of USA short rate strategy at Bank of America Merrill Lynch.
"It's just the latest log on the fire", said Schumacher.
That means billions of dollars of demand is disappearing just as the Treasury plans bigger bond auctions, for the first time since 2009, to finance a growing deficit.
"I've heard some folks glibly say "inflation", but that's stupid as the Fed will react, bond yields soar, and there's your recession". That compares with $420 billion net a year ago in notes and bonds. Traders are also facing the prospect of Fed rate hikes, which could cool growth. "Is there more inflation down the road than we're expecting?"
"The cause of this correction is the ostensibly withdrawal of liquidity by central bankers, and consequently rising interest rates".
"Equities are going to do this until they don't", said Art Hogan, chief market strategist at Wunderlich Securities.
Boockvar said the US bond market is responding to rising German bund yields, which are expected to keep rising. Both industries are capital-intensive, requiring frequent loan rollovers and bond issues, so higher borrowing costs have outsized effects on bottom line profits. Dallas Fed President Robert Kaplan speaks at 4:50 a.m. ET in Frankfurt, Germany.
Fed speakers will get a lot of attention Thursday.
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