Rising government bond yields are exerting pressure on global equity markets, as traders reassess their expectations for interest-rate cuts by major central banks following a robust US jobs report. The increase in bond yields, which raises the cost of equity by elevating the discount rate for future cash flows, has led to a decline in stock prices, with technology shares being particularly affected due to their sensitivity to interest rate changes. Additionally, the surge in oil prices is intensifying inflationary concerns, potentially leading to higher interest rates and further impacting equities by increasing borrowing and operational costs.
In the commodities market, West Texas Intermediate (WTI) crude oil has seen a notable rise, reflecting the broader inflationary pressures. As of 05:40 on January 13, WTI crude is trading at $77.99, up from its last close of $76.57, marking the highest level since July. This increase in oil prices is contributing to the inflationary environment, which is influencing market dynamics across various asset classes.