Global stocks sell off as bond yields rise

All three US stock market benchmark indexes fell sharply overnight, as the 10-year benchmark US Treasury yield continues its rapid climb.

The 10-year yield was up by 6 basis points to 1.54%, its highest level since June this year.

The spike came as US Fed Reserve Jerome Powell delivered a prepared statement to the Senate, warning that higher inflation may last longer than anticipated.

“Inflation is elevated and will likely remain so in coming months before moderating,” Powell said.

The Dow Jones fell by 1.63%, the S&P 500 by 2.04% and tech heavy Nasdaq by 2.83% as tech stocks were routed as yields rose.

European stocks also fell across the board, with the pan-European STOXX 600 index falling by 2.2% – its biggest fall in over two months.

Meanwhile, US Treasury Secretary Janet Yellen warns the US government will run out of money by October 18th if the debt ceiling is not raised.

Failure to avert a government shutdown, Yellen said, could undermine the economy and the US dollar.

In other markets, the spot iron ore price has fallen back by 5% overnight to US$112.35/t. Oil prices meanwhile, were down slightly, with Brent crude now back under the US$80 level to US$79.09.

To cryptos, where Bitcoin is also falling sharply to US$41,700 at 8:00am AEST this morning, from US$43,200 yesterday.

The crypto market has been on a knife edge for the past 24 hours, and it seems to be continuing in this fashion for now.

ASX 200 to open lower on Wednesday

Following action on Wall Street, the ASX 200 looks set to open lower his morning, with futures markets (December contracts) pointing down by 1.15% at 8:30am AEST.

Yesterday, the Aussie benchmark index fell by 1.47%, with Health, Resources and Tech all falling by over 2%.

On the IPO front, set to list at 11am AEST is Afterpay (ASX:APT) backed investment vehicle Touch Ventures (ASX:TVL).

Touch Ventures raised $100 million at 40 cents a share, and is set to be capitalised at $285.3 million on its ASX debut.

TVL has made five investments prior to the release of its prospectus, totalling $75.4 million to date.

5 ASX small caps to watch today

Devex Resources (ASX:DEV)
The company says multiple new uranium, copper and gold exploration targets were identified as part of a recently completed technical review at its Nabarlek Uranium Project. The project is situated in the heart of Australia’s highest-grade uranium mine, with past production of 24Mlbs @ 1.84% U3O8.

Ragnar Metals (ASX:RAG)
The company announced that permits have been granted in Sweden for its 100% owned nickel-copper Tullsta Project at Granmuren. The work permit is granted for a period of 2 years, and the Environmental Access Permit is granted for a 5 year period.

Immutep (ASX:IMM)
The biotech company says it has received a €2,126,617 (or around A$3.43m) research and development (R&D) tax incentive payment from the French Government. The rebate was available to IMM due to its R&D activities at a laboratory at Châtenay-Malabry in southwestern Paris.

Iris Metals (ASX:IR1)
The company announced that an RC drilling program has commenced at its flagship Kookynie gold project. The first phase of the program will consist of approximately 5,000 meters of RC drilling, with an initial focus on drill testing areas that have a history of hosting high grade gold mineralisation.

Lithium Power (ASX:LPI)
The company says that updated resource measures of the Maricunga Stage One Lithium Brine Project in Chile confirmed a 90% increase compared to its 2019 feasibility study. LPI’s Measured and Indicated (M&I) resource is now estimated at 1,905,000 tonnes of Lithium Carbonate Equivalent (LCE).