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Nasdaq Futures Plunge As Bond Rout Sends 10Y Treasury To 1.75%

It started off well enough, with futures initially continuing their post-FOMC ascent and lifting global markets.

However, It all reversed sharply during the Asian session driven by a sharp spike in the 10Y TSY, which initially jumped following a Nikkei report that the BOJ readied to adjust monetary policy and will look at measures that will allow long-term interest rates to move in “a slightly larger range of about 0.25%, versus 0.2% now” in order to make life easier for financial institutions. The news, which came during the Japanese trading break forced local traders to sell US paper instead.

The selloff then accelerated sharply when Europe opened, and pushed the 10Y as high as 1.75%, a level which BofA two weeks ago said was the “tipping point” for bonds…the highest level since Jan 2020, while the 30-year topped 2.5% a level that hasn’t been seen since August 2019.

The algos took one look at the fresh surge in yields and dumped risk assets with a focus on high duration “bathwater” tech names, slamming Nasdaq 100 futures 1.7% lower.

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