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Bonds rout… is good news for stocks? And Biden heads to Europe.Bond selloffGlobal bond markets have suffered unprecedented losses since peak [View in browser]( [Bloomberg]( Bonds rout… is good news for stocks? And Biden heads to Europe. Bond selloff Global bond markets have suffered [unprecedented losses]( since peaking last year as central banks tighten policy to quell surging inflation. The decline in the Bloomberg Global Aggregate Index from its high in January 2021 equates to a drop in the index market value of about $2.6 trillion, worse than about $2 trillion in 2008. Meanwhile, [consumer prices rose]( more than forecast in the U.K. last month, with investors wondering what that will mean for Chancellor Rishi Sunak's Spring Statement, due later today. Spiraling prices are prompting former Pimco CEO Mohamed El-Erian to [urge investors]( to use the rally in stocks to reduce exposure. There’s upside ...so what does that mean for stocks? Despite popular concerns that a hawkish Federal Reserve is bad for equities, history shows that global shares have actually rallied during previous [tightening cycles](. We're seeing some early signs of that, with the S&P 500 Index rallying in five of the last six sessions, even as policy makers raised rates and promised more to come, while war continues to rage in Europe. One possible reason is that stocks are seen as a good [hedge]( against rising prices because companies can pass those costs onto consumers. Biden in Europe U.S. President Joe Biden [is seeking to]( rally U.S. allies around harder-hitting sanctions on Russia. Biden will join back-to-back summits Thursday with NATO, the Group of Seven and the European Union in Brussels and is expected to announce new Russia sanctions and energy aid for Europe. Germany and Hungary, meanwhile, sought to put the brakes on a potential Russian oil embargo. [Poland]( is reportedly expelling about 40 Russian diplomats, while [Wall Street’s retreat]( from Russia is the fastest and harshest ever. Stocks slip European stocks were [slightly lower]( after a slow start. Euro Stoxx 50 is roughly 0.5% lower while the Stoxx 600 is down 0.2% with real estate, banks and tech names weighing. Energy is the best performing sector. U.S. index futures slipped. U.K. bonds led a push higher in fixed income and European debt plays catch up after the EU budget chief downplayed the need for new joint debt issuance. Oil is up a percentage point or so, metals are mostly positive with LME nickel seeing the largest gains. Spot gold halves Tuesday's losses to trade near $1,927/oz. Coming up... Once again, central bankers are likely to steal the show today with speakers due from the ECB, BOE and Fed, including an appearance by Fed Chair Jay Powell as part of a BIS Panel discussion at 8 a.m. Economic data is limited to the February New Home Sales release, due at 10 a.m., and the DOE oil inventory numbers at 10:30am. Elsewhere, U.K. Chancellor Rishi Sunak will deliver the government's Spring Statement at 9:30 a.m. U.S. bond auctions include $22 billion of 2-year floating rate notes at 11:30 am and $16 billion of 20-year bonds at 1:00pm. In earnings, General Mills reports. What we've been reading Here's what caught our eye over the past 24 hours. - [Microsoft confirms hacker ]([Wall Street is scrambling](for the exits in Moscow. - [Microsoft confirms hacker](group Lapsus$ breached its systems. - World tennis no. 1 Ash [Barty announces retirement]( at 25. - [China’s military is growing]( fast. - [London’s threat from Amsterdam]( hasn’t gone away. - [Bet of a lifetime]( made an Indonesian man a billionaire. - The [hunt for superyachts]( of sanctioned Russian oligarchs. And finally, here’s what Joe’s interested in this morning [Yesterday for the Odd Lots blog](, I wrote about the powerful stock market rally that started early last week. We're down a hair this morning, but overall, S&P 500 futures are up nearly 9% since the lows on March 9. It's probably dangerous to try reading much into any move. But regardless, one way to think about the current macro situation is that inflation will come down through some combination of policy tightening and natural normalization (supply chain easing, consumption shifting back to services etc.). What we don't know is the mix of the two drivers. If current inflation is still being driven in large part via transitory factors, then perhaps the Fed won't have to do too much -- won't have to hike too aggressively to get it back in a comfortable range. On the other hand, if it's all about policy at this point, the Fed might have to go faster and more aggressively than what markets are pricing in. The more reality resembles this latter scenario, the worse it would likely be for investors. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Special Daily Brief: Russia's Invasion of Ukraine [Keep up with the latest news]( on the Russian invasion of Ukraine, one of the worst security crises in Europe since World War II. 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