Live news updates: Putin gives Russian passport to US whistleblower Edward Snowden

Wall Street equities closed at the lowest level since December 2020, while US Treasury yields lurched higher after intense volatility in Britain’s gilt market and a lacklustre sale of new Treasuries shook investor sentiment.

The blue-chip S&P 500 share index ended the day down 1 per cent after having lost 4.7 per cent over the course of the previous week. The technology-heavy Nasdaq Composite fell 0.6 per cent on Monday.

Monday’s wobble in equities came as the yield on the 10-year US Treasury note, a benchmark for global borrowing costs, added 0.22 percentage points to 3.92 per cent — the highest level since 2010. Bond yields rise when prices fall.

The selling in the US followed a brutal session in London, in which gilt yields surged for the second trading day in a row after the UK government’s plans for big tax cuts spooked investors. Britain’s 10-year gilt yield rose on Monday by its most in 40 years, according to Refinitiv data.

A sale of US two-year Treasuries on Monday also highlighted how fund managers are demanding the government pay higher borrowing costs on expectations the Federal Reserve will continue pushing interest rates sharply higher. 

Last week, the Fed led the charge on a series of interest rate rises by other global peers, implementing a third consecutive increase of 0.75 percentage points to a target range of 3 to 3.25 per cent.

The dollar, which tends to strengthen in times of economic and market stress, added 0.8 per cent against a basket of six peers, hitting a fresh 20-year high.

Read more on markets here.