Asian stocks weather bond storm, oil retreats slightly
SPY•Asian shares were mixed as a global bond selloff pushed U.S. long-term yields to multi-year highs, while Brent crude eased 1.2% to $105.30 a barrel. The dollar was on track for a 1% weekly gain as markets priced in further Federal Reserve rate hikes.
1. Mixed trading in Asia
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1%, with mainland China, Taiwan and South Korea among markets closed for a holiday. Japan's Nikkei rose 1.3%, Australia's resources-heavy shares fell 0.4% and Hong Kong's Hang Seng dropped 1.4%.
2. Bond yields climb
The U.S. 10-year Treasury yield rose 1 basis point 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%, its highest since 1996.
3. Rate expectations rise
Fed funds futures implied a 73% chance of another rate hike next month, up from about 53% earlier in the week. Brent crude eased 1.2% to $105.30 a barrel after rising 3% overnight, while the dollar gained 1% on the week to 101.22 against major peers.
