Asian Stock Market: Tracks Wall Street gains as Treasury yields retreat
- Markets in Asia-Pacific region remains firmer as softer yields join firmer stock futures.
- Easing fears over Russia-Ukraine tussles battle the US-China trade jitters amid mostly quiet Asian session.
- Fed/ECB speakers refrained from harsh comments over inflation of late.
- Fedspeak, second-tier data may entertain traders but US CPI is the key.
Asian equities remain firmer heading into Wednesday’s European session as risk appetite improved on a pullback in the US Treasury yields and receding fears of the Russia-Ukraine war.
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That said, Reuters quotes French President Emmanuel Macron as the first Western leader to cite the possibility of de-establishing geopolitical fears. However, the UK and the US aren’t on the supporting side and hence the jitters could continue testing market sentiment.
Elsewhere, US 10-year Treasury yields jumped to the highest levels since July 2019 the previous day before recently easing to 1.945%. The bond coupon eased even after San Francisco Fed President Mary Daly favored the March rate hike in her latest speech. The policymaker additionally mentioned, “Fed can't be overly aggressive on rate increases,” while saying, “US inflation could get worse before it gets better.”
Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan rises 1.50% intraday whereas Japan’s Nikkei 225 adds over 1.0% by the press time. Stocks in Japan benefit from concerns, raised by Bloomberg, over the Bank of Japan’s shift to tighter monetary policies considering covid fears in Tokyo and Governor Haruhiko Kuroda’s favor for easy money.
Shares in China and Hong Kong lead the bull-run even as the Sino-American trade tussles escalate. The up-moves could be linked to China State Funds’ support to equities.
Further, shares in South Korea, Indonesia and India also track other counterparts in Asia as markets await headline US inflation data amid mixed comments from the Fed and ECB policymakers of late.
It should be noted that the US Dollar Index (DXY) pares recent gains while prices of gold and crude cheer the USD pullback.
Read: US T-bond yields tease multi-year top, S&P 500 Futures print mild gains amid inflation concerns