Asian stocks weather bond storm as oil retreats slightly
TLT•Asian shares were mixed as a global bond selloff pushed longer-dated U.S. Treasury yields to multi-year highs, while Brent crude fell 1.2% to $105.30 a barrel. The dollar rose 1% for the week as markets priced in further Federal Reserve rate hikes.
1. Asian shares mixed
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% on Friday, with several markets closed for a holiday. Japan's Nikkei rose 1.3%, Australia's shares fell 0.4% and Hong Kong's Hang Seng dropped 1.4%.
2. Bond yields rise
The 10-year U.S. Treasury yield rose to 5.1751%, after reaching 5.2251%, its highest level in 19 years. The 30-year yield had climbed to 5.5016%, its highest since 2004, while Japan's 10-year government bond yield reached 3.115%, a high not seen since 1996.
3. Rate expectations firm
Fed funds futures implied a 73% chance of another rate hike next month, up from about 53% earlier in the week. The dollar was up 1% for the week at 101.22 against major peers, while Brent crude eased after rising 3% overnight.
