Stocks Rise as Traders Weather Higher Bond Yields: Markets Wrap

Romeo Ranoco („Reuters“ / „Scanpix“) nuotr.

Asian stocks climbed across the region Friday as investors continue to debate the outlook for central bank policy normalization and the impact of higher bond yields. The dollar recovered some of the previous day’s losses and Treasuries were little changed.

The MSCI Asia Pacific Index rose as equities climbed in Tokyo, Hong Kong, Sydney and Seoul. The U.S. offered little fresh direction overnight, with the S&P 500 Index closing just in the green, after losing most gains for a fourth straight day in afternoon trading. The dollar strengthened against most major currencies and ten-year U.S. yields remain near their highest since 2014.

Interest-rate-hike jitters returned to markets after minutes of the Federal Reserve’s January meeting indicated the central bank is confident the economy is strengthening. Subsequent data confirmed that view, but also brought signs of rising inflation, cutting against the long-held view that it will remain short of policy makers’ targets.

“Investors are just nervous about interest rates,” said Paul Nolte, a portfolio manager at Kingsview Asset Management in Chicago. “Everybody is waiting for more economic data to confirm or deny whatever the Fed position is. It’s a big case of the nerves.”

Elsewhere, the euro slipped after minutes from the European Central Bank showed officials continue to lay the ground for a shift in policy language in the first half of the year. Bitcoin fell below $10,000. U.K. PM Theresa May is locking down her ministers in a bid to agree what kind of post-Brexit trade deal they want from the EU.

These are the main moves in markets:

Stocks

The MSCI Asia Pacific Index advanced 0.9 percent as of 4:20 p.m. Tokyo time. Topix index rose 0.8 percent. Hong Kong’s Hang Seng Index rose 1 percent. Kospi index climbed 1.5 percent. Australia’s S&P/ASX 200 Index gained 0.8 percent. Futures on the S&P 500 Index advanced 0.5 percent.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent. The Japanese yen fell 0.3 percent to 107.07 per dollar. The euro fell 0.3 percent to $1.2293.

Bonds

The yield on 10-year Treasuries rose less than one basis point to 2.92 percent. Japan’s 10-year yield fell less than one basis point to 0.054 percent.

Commodities

West Texas Intermediate crude fell 0.1 percent to $62.69 a barrel. Gold fell 0.4 percent to $1,326.97 an ounce. LME copper fell 0.2 percent to $7,145.00 per metric ton.

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