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Europe markets close mixed as Treasury yields rise; FTSE 100 climbs on UK budget speech

European stocks whipsawed Wednesday as investors monitored U.S. Treasury yield movement while reacting to earnings and the U.K.’s latest budget statement.

Sentiment was shaken Wednesday as the yield on the benchmark U.S. 10-year Treasury note climbed again, surpassing 1.47% after U.S. President Joe Biden said the country will have a large enough supply of coronavirus vaccines to inoculate every adult in the nation by the end of May — two months earlier than previously expected.

Back in Europe, Britain’s finance minister announced Wednesday that U.K. corporation tax will increase to 25% in April 2023 as the government looks to restore public finances in the aftermath of the Covid-19 pandemic.

Sunak announced a further £65 billion worth of fiscal measures for 2021/22, bringing the government’s total response since the onset of the pandemic to £407 billion.

On the data front, IHS Markit’s final euro zone composite PMI (purchasing managers’ index) reading for February came in at 48.8, up from 47.8 in January and exceeding analyst expectations, but signaling that economic activity in the bloc remained in contraction.

“The Eurozone faces the possibility of lapsing back into recession – not that any prior ‘recovery’ has been especially meaningful,” said VTB Capital Global Macro Strategist Neil MacKinnon.

“Recent incoming economic data show that recessionary risks are not just located in the debt-burdened southern bloc, but are also to be found in Germany, the leading creditor and trade surplus economy for the entire monetary union.”

Reference: CNBC