U.S. stock markets were expected to open lower on Thursday, judging by trade in equity index futures, as a sell-off in government bonds gathered pace.
Weekly jobless claims and productivity and costs data are due for release this session, but the wild swings in bond markets are expected to take centre-stage for the time being.
The benchmark-10-year Treasury yield, which moves in the opposite direction of its price, topped 2.40 percent in European trade, setting a new high for the year. It tracked the 10-year German Bund yield, which soared to just shy of 1 percent, extending a rise that began on Wednesday after European Central Bank President Mario Draghi played down the impact of bond market volatility.
"Over the last few months we've seen some pretty extraordinary moves in the bond markets. In April, and again over the first few days of June, bonds have traded over 2-3 percent daily trading ranges - ranges that would be considered extreme a few years ago for such safe, predictable, non-volatile core investment instruments," Bill Blain, a strategist at Mint Partners, said in a note.
"It's not just bonds. We hear from investors they are increasingly concerned stock market valuations look overblown, and there are fears bubbles have developed in many other markets including property," he added.