European bond yields soar on tightening talk, U.S. stock futures dip

European bond yields soar on tightening talk, U.S. stock futures dip

LONDON- European bond yields jumped on Monday after the European Central Bank last week drove speculation about monetary tightening as soon as March, while U.S. stock index futures indicated a lower Wall Street open on U.S. inflation and rate hike worries.

Markets are on alert for rate rises in both the euro zone and the United States after the ECB last week was considered to have adopted a more hawkish tone. The United States reported stronger than expected jobs and earnings data.

"The most dominant thing is still central banks and the tightening we see there, that has led to the volatility," said Matthias Scheiber, global head of portfolio management at Allspring Global Investments.

German 10-year government bond yields hit three-year highs and Italian 10-year yields hit their highest since May 2020, with Italy seen particularly vulnerable to rate increases due to its high levels of debt.

Two-year U.S. Treasury note yields hit a two-year high and U.S. 10-year yields stayed close to two-year highs hit on Friday.

S&P 500 futures and Nasdaq futures fell around 0.2% after turmoil last week in growth-sensitive tech stocks saw Amazon.com Inc gain almost $200 billion while Facebook-owner Meta Platforms Inc lost just as much.

European stocks were steady, though