Today, both A shares and Hong Kong stocks were slightly under pressure. The Shanghai Composite Index closed down 0.11% and the Hang Seng Index closed down 0.54%. The top three major stock index futures in the US stock market all fell slightly.

Source: Yingwei Financial Information investing

At the same time, the yield on the 10-year Treasury note continued to climb today, reaching 2.998% at one point, approaching the 3% mark.

Source: Yingwei Financial Information investing

3% is regarded as the benchmark of the global bond market, and by many market leaders as a watershed in the bull and bear markets of debt and stock markets. If the uptrend continues, the market will be more interested in investing in the bond market than in the stock market.

The important 3% mark has been mentioned all the time, and it is also regarded as one of the weather vane of stock market investment by more and more investors.

Why is 3% an important psychological barrier?

Source: Bloomberg

• Since 2011, the 3% red line has only been hit in 2013 and 2014. During February and March, the yield on 10-year Treasuries was also close to 3%. Bigwigs such as the "new bond king" Jeffrey Gundlach regarded the 3 per cent yield as a "red line" and warned that the stock market would turn downwards once it broke through.

• David Sneddon, global head of technical analysis at Credit Suisse, points out that the bond market reaches a tipping point only when the yield on the 10-year Treasury exceeds 3.05 per cent, which last hit 3.05 per cent in 2011. Global stock markets lost 12.1% of their value in 2011, losing nearly $6.3 trillion, according to Bloomberg data.

The yield on the bond is the expected return of investors for the purchase of the bond. Buying it at a lower price will increase investors' returns, while paying a premium will reduce overall returns.

In the $14.9 trillion Treasury market, the benchmark is the real-time price of 10-year Treasuries.Simply put, it is the reference standard for borrowing costs in global capital markets. If the yield of the bond market continues to rise, it means that the financing costs of market entities such as enterprises will increase, which is bound to affect the development of corporate financing and the confidence of investors, and the credit burden of ordinary people will also increase.

In addition, the fed has also signalled that it will raise interest rates further, leading many market participants to believe that there is little doubt that the 10-year Treasury yield above 3% is coming.

Why did Treasury yields rise?

1) the US economy began to recover, and the Federal Reserve began to raise interest rates and short-term lending rates.

2) inflation in the United States is showing signs of picking up, which means that investors have higher requirements for corresponding bond yields.

At present, it is generally believed that the pace of Fed tightening is gradually accelerating, and US bond yields will "rise all boats" in the future.

What impact will it have on the stock market?

Some market participants attributed the rise in Treasury yields to the stock market correction in February, which led to the Dow's biggest one-day decline in history.

Bond market bears believe that inflation has arrived and the economy is getting hotter and hotter. Bond market bulls say the Fed's rate hike is nearing its limit and that the market cannot afford higher borrowing costs unless economic growth slows.

With the further rise in current treasury bond yields, the attractiveness of the stock market for investors is weakened. if there is a sustained rise, it may cause investors to sell stocks and choose bonds with low risk and stable yields.

The current consensus is that yields have risen rapidly. More than half of the 56 analysts surveyed by Bloomberg expect the 10-year yield to rise to 3% by the end of 2018. (editor / Wu Dongxia)