Treasury Yields Rise; Most Asian Stocks Advance: Markets Wrap




  • In Business
  • 2022-01-18 00:17:37Z
  • By Bloomberg
 

(Bloomberg) -- Treasury yields rose Tuesday after cash trading resumed following a holiday, while most Asian stocks advanced as investors weighed the economic recovery from the pandemic.

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The drop in U.S. government bonds saw the two-year yield jump past 1% for the first time since February 2020. Investors are girding for a series of interest-rate hikes by the Federal Reserve to quell high inflation.

Shares climbed in Japan and Australia but wavered in South Korea. Nasdaq 100 and S&P 500 futures were broadly steady. U.S. markets will reopen later following a holiday.

The yen pared a drop ahead of the Bank of Japan rate decision. The monetary authority is expected to sit tight on accommodative policy while bumping up its inflation projection.

Global stocks have slipped this year, hurt by a retreat in U.S. shares. A key question now is whether company profits will revive sentiment, despite higher costs and challenges from the omicron virus strain.

"It will be interesting to see if investors are tempted back in now that earnings season is underway," Craig Erlam, senior market analyst at Oanda, wrote in a note. "The emergence of omicron may mean that many companies don't enjoy the kind of performance that was expected before, but that doesn't mean there won't be plenty of positives to take away."

JPMorgan Chase & Co. strategists contend that global corporate earnings will deliver significant beats this year, again defying doomsayers and skeptics.

China's market open will be framed against expectations for more monetary easing in the wake of Monday's policy rate cuts, contrasting with the shift toward tighter central bank settings in a range of other economies.

Elsewhere, oil climbed as geopolitical tensions stirred in the Middle East. In cryptocurrencies, Bitcoin fell back to around $42,000 and is down about 10% so far in 2022.

For more market analysis, read our MLIV blog.

What to watch this week:

  • Goldman Sachs, Morgan Stanley, Bank of America, UnitedHealth Group and Netflix are among companies publishing earnings during the week

  • U.S. data includes Empire manufacturing Tuesday, housing starts Wednesday and jobless claims Thursday

  • Bank of Japan monetary policy decision, Tuesday

  • Interest-rate decisions due from nations including Indonesia, Malaysia, Norway, Turkey and Ukraine, Thursday

  • EIA crude oil inventory report, Thursday

Some of the main moves in markets:

Stocks

  • S&P 500 futures were steady as of 9:08 a.m. in Tokyo. The S&P 500 rose 0.1% on Friday

  • Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 0.8% on Friday

  • Japan's Topix index added 0.5%

  • Australia's S&P/ASX 200 index rose 0.2%

  • South Korea's Kospi index fell 0.2%

Currencies

  • The Bloomberg Dollar Spot Index was steady

  • The euro was little changed at $1.1409

  • The Japanese yen was at 114.56 per dollar

  • The offshore yuan was at 6.3519 per dollar

Bonds

  • The 10-year U.S. Treasury yield increased three basis points to 1.81%

  • Australia's 10-year bond yield slipped two basis points to 1.90%

Commodities

  • West Texas Intermediate crude rose 0.4% to $84.17 a barrel

  • Gold was at $1,818.82 an ounce

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©2022 Bloomberg L.P.

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