World shares sank on Monday as expectations for faster economic growth and inflation battered bonds and boosted commodities, while rising real yields made equity valuations look more stretched in comparison. MSCI’s All Country World Index, which tracks shares across 49 countries, was down 0.25% by midday in London. The pan-European STOXX 600 index was down 0.6%, hitting its lowest in 10 days. Germany’s DAX and France’s CAC 40, and Britain’s FTSE 100 fell 0.5% each. Spain’s IBEX 35 index and Italy’s FTSE MIB lost 0.6% each. S&P 500 futures fell to their lowest since Feb. 5, down 0.85% on the day. Bonds have been bruised by the prospect of a stronger economic recovery and greater borrowing as President Joe Biden’s $1.9 trillion stimulus package progresses. Federal Reserve Chair Jerome Powell delivers his semi-annual testimony before Congress this week and is likely to reiterate a commitment to keeping policy super easy for as long as needed to drive inflation higher. “The coming week is relatively thin on the international data agenda, but after the recent rise in long bond yields, Fed Chairman Powell’s hearings in both chambers of Congress (Tuesday / Wednesday) will be attracting great interest,” said Elisabet Kopelman, U.S. economist at SEB. “The fact that the most recent rise in long bond yields has been driven by higher real interest rates and not just inflation expectations increases the probability of a dovish message.” European Central Bank President Christine Lagarde is also expected to sound dovish in a speech later Monday. Yields on 10-year Treasury notes have already reached 1.38% , breaking the 1.30% level and bringing the rise for the year so far to a steep 43 basis points. Analysts at BofA noted 30-year bonds had returned -9.4% in the year to date, the worst start since 2013. “Real assets are outperforming financial assets big in ‘21 as cyclical, political, secular trends say higher inflation,” the analysts said in a note. “Surging commodities, energy laggards in vogue, materials in secular breakouts.” Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.18%, after slipping from a record top last week as the jump in U.S. bond yields unsettled investors. Japan’s Nikkei recouped 0.8% and South Korea 0.1%, but Chinese blue chips lost 1.4%. A COPPER-PLATED RECOVERY One of the stars has been copper, a key component of renewable technology, which shot up 7.7% last week to a nine-year peak. The broader LMEX base metal index climbed 5.5% on the week. Oil prices have gone along for the ride, aided by tightening supplies and freezing weather, giving Brent gains of 22% for the year so far. On Monday, Brent crude futures were up 0.7% at $63.33 a barrel. U.S. crude added 0.7% to $59.65. All of that has been a boon for commodity-linked currencies, with the Canadian, Australian and New Zealand dollars all higher for the year so far. Sterling reached a three-year top of $1.4050, aided by one of the fastest vaccine rollouts in the world. England will ease lockdown restrictions in five-week intervals, Sky News reported on Monday, hours before Prime Minister Boris Johnson is due to announce details of his roadmap for re-opening the country. The U.S. dollar index has been relatively range-bound, with downward pressure from the country’s expanding twin deficits balanced by higher bond yields. The index was last at 90.342 , not far from where it started the year at 90.260. Rising Treasury yields has helped the dollar gain against the yen to 105.60, given the Bank of Japan is actively restraining yields at home. The euro was steady at $1.2135, corralled between support at $1.2021 and resistance around $1.2169. One commodity not doing so well is gold, partly due to rising bond yields and partly as investors question if crypto currencies might be a better hedge against inflation. Gold stood at $1,795 an ounce, having started the year at $1,896. Bitcoin was off 5.8% on Monday at $54,127, off a record high of $58,354.