Tech selloff deepens

Released yesterday, PCE inflation numbers in the US confirmed the heating price pressures in the country. The monthly figures came in line with expectations: an advance to more than 4% for the headline figure and a rise to 3.4% y-o-y for the core figure. But because the figures were in line with expectations, US yields fell following the data release. The US 2-year yield, which best captures Federal Reserve (Fed) rate expectations, eased to nearly 4%, down from above 4.20% at the beginning of the week.

The pullback also came despite a rebound in oil prices following reports that a ship had been attacked in the Strait of Hormuz. That oil rebound, however, remained short-lived as US crude is softer this morning, consolidating around the $70pb level, with investors overlooking the rising geopolitical tensions and not pricing in the risk of further escalation into the weekend.

The latter — the relatively relaxed reaction to the latest Middle East news — along with Micron's blockbuster results, could have encouraged a risk rebound across US and global markets yesterday, but didn't.