Asian stocks weather bond storm as oil retreats slightly
TLT•Asian shares were mixed as a global bond selloff pushed U.S. 10-year Treasury yields to a 19-year peak of 5.2251%. Brent crude eased 0.8% to $105.75 a barrel, while the dollar was on track for a 1% weekly gain.
1. Bonds pressure markets
Asian shares held mixed as a global bond selloff lifted borrowing costs and U.S. long-term yields to multi-year highs. Japan’s 10-year government bond yield rose 4 basis points to 3.115%, its highest since 1996, while Australia’s 10-year yield also gained 4 basis points to 5.408%. The 10-year U.S. Treasury yield rose 1 basis point to 5.1915%, after reaching 5.2251.
2. Rate bets and oil
Fed funds futures implied a 71% chance of another rate hike next month, up from about 53% earlier in the week. The dollar was up 1% for the week at 101.25 against major peers. Brent crude eased 0.8% to $105.75 a barrel after rising 3% overnight.
3. Regional share moves
The broadest MSCI index of Asia-Pacific shares outside Japan was flat, with many markets closed for a holiday. Japan’s Nikkei rose 1%, Australia’s shares fell 0.6% and Hong Kong’s Hang Seng slid 1%.
