Business Maverick

Business Maverick

Asian bonds track US rally; India stock futures up: markets wrap

Asian bonds track US rally; India stock futures up: markets wrap
Electronic board indicating the latest stock figures are reflected in a glass facade at the National Stock Exchange of India Ltd. (NSE) in Mumbai, India, on Friday, 16 December 2016. (Photo: Dhiraj Singh/Bloomberg)

Bonds tracked Treasuries higher in Asia trading on signs of a cooling US labor market that buoyed Federal Reserve rate-cut bets. Stocks struggled for direction. 

Australian and Japanese notes rose after US data showed job openings hit the lowest since 2021. That lifted Treasuries on Tuesday — sending the 10-year yield down six basis points — and reinforced speculation that the Fed will be able to lower rates this year. Treasury yields were little changed on Wednesday. 

Stocks were mixed in the region, with Japanese equities sliding more than 1%. Benchmarks jumped in Hong Kong and South Korea, supported by rates-sensitive tech shares. India will be in focus as it becomes clear that Prime Minister Narendra Modi’s party will need to form a coalition to retain power. Futures contract for the nation’s stock benchmark Nifty 50 climbed after the index sank nearly 6% on Tuesday.

“Asian markets remain in the ‘direction-seeking’ mode today but with no shortage of spotlight markets,” said Hebe Chen, market analyst at IG Markets Ltd. “The ripple effect of political noise in India throughout the financial world will be closely monitored in the stock market.”

A Bloomberg gauge of dollar strength was little changed after eking out gains in the past two sessions. In Japan, the yen pulled back against the greenback after Japan released April wage data that raised questions about the strength of gains in pay.

Markets are shifting focus to a slew of labor-market readings this week, including Friday’s US jobs report, for further clues on when the Fed will deploy rate cuts. US stock futures traded with modest gains in Asia.

To Bill Adams at Comerica Bank, the risk of wage-price pressures fueling inflation is falling, which has the Fed breathing easier than a few years ago. That’s probably why chair Jerome Powell took it in stride when inflation accelerated earlier this year, saying hikes were unlikely, he said. 

“The evidence is accumulating that the Fed should begin easing,” said Ronald Temple, chief market strategist at Lazard.

In commodities, oil was steady after falling on Tuesday following an industry report that pointed to an increase in US crude stockpiles. Bitcoin topped $70,000.

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