Asian Stocks Slip With Treasury Yields Above 3%: Markets Wrap

Publikuota: 2018-05-16
A trader works on the floor of the NYSE American Options market at the New York Stock Exchange, (NYSE) in New York, U.S., April 16, 2018. REUTERS/Brendan McDermid
A trader works on the floor of the NYSE American Options market at the New York Stock Exchange, (NYSE) in New York, U.S., April 16, 2018. REUTERS/Brendan McDermid
 

Most stocks in Asia followed their American counterparts lower as geopolitical developments and rising benchmark U.S. yields spurred a return of risk aversion.

Equities in Japan, Hong Kong and China declined after U.S. stocks slid overnight. Australian shares bucked the trend while Korean ones fluctuated. Yields on 10-year Treasuries held near the highest since 2011 after traders boosted bets that the Federal Reserve will raise interest rates three more times this year. Bloomberg’s dollar index steadied close to a 2018 high. In emerging-markets, equities maintained losses after dropping the most since March and currencies held onto declines after the biggest slide in a year.

Risk aversion spread across asset classes as investors -- already uncomfortable with rising yields and a strong dollar -- grappled with trade, growth, and geopolitical worries. Fresh uncertainty about the U.S.-North Korea summit, violence in the Middle East, the U.S.-China trade spat, and global growth concerns are fueling negative sentiment.

“Risk premiums are still awfully compressed,” Jeffrey Johnson, head of Asia-Pacific fixed income, Vanguard Investments Australia, said at the Bloomberg Invest summit in Sydney. “We look at valuations, particularly on more risky asset classes like equities -- they are at fairly high levels still.”

Elsewhere, established safe-haven assets failed to ignite, despite the gloomy sentiment. Gold steadied below $1,300 an ounce for the first time since December and the yen maintained a decline.

These are some key events to watch this week:

Chinese Vice Premier Liu He is expected in Washington for more trade talks. European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K. U.K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union. U.S. industrial production numbers are due this week.

These are the main moves in markets: Stocks

The MSCI Asia Pacific Index fell 0.1 percent as of 2:28 p.m. Tokyo time. Topix index fell 0.3 percent. Hong Kong’s Hang Seng Index fell 0.2 percent. Kospi index rose 0.1 percent. Australia’s S&P/ASX 200 Index advanced 0.3 percent. Futures on the S&P 500 Index rose less than 0.05 percent.

Currencies

The Bloomberg Dollar Spot Index fell less than 0.05 percent. The Japanese yen rose 0.1 percent to 110.27 per dollar. The euro fell less than 0.05 percent to $1.1833.

Bonds

The yield on 10-year Treasuries was at 3.07 percent. Australia’s 10-year yield rose about six basis points to 2.887 percent.

Commodities

West Texas Intermediate crude fell 0.3 percent to $71.13 a barrel. Gold rose 0.3 percent to $1,293.76 an ounce. LME copper rose 0.1 percent to $6,818.00 per metric ton.

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