SYDNEY (Reuters) – Asian stocks paused on Monday as Treasury yields hit 10-month highs as “trillions” in new US fiscal stimulus plans were to be unveiled this week, fueling a global trade rebound. .
Investors have been watching US policy closely as pressure has risen to blame President Donald Trump, although there are signs that a trial itself could be a long way off.
The largest MSCI index of Asia-Pacific equities outside Japan fell 0.2%, after rising 5% last week to record highs. The Japanese Nikkei was on vacation after closing on Friday at a maximum of 30 years.
South Korea paid after an early jump, and Chinese chips confirmed 0.7%.
“Asia has gone through the second global crisis of this millennium with its credentials,” said ANZ chief economist Richard Yetsenga.
“Asia’s growth is stronger, with a majority of demographics and debt better than advanced economies.”
He noted a shift in wealth between the semiconductor and energy sectors, highlighting Asia’s success, with the region producing about 45% of the world’s semiconductors.
“For the first time, the global market capitalization of the semiconductor sector has surpassed energy,” he said. “At the time of the last crisis, 12 years ago, the energy sector was more than five times larger.”
S&P 500 futures fell 0.6% from all-time highs, after gaining 1.8% last week. EUROSTOXX 50 futures fell 0.1% and FTSE futures were flat.
Longer-term Treasury yields were the highest since March, after Friday’s weak jobs report only made speculation about more US fiscal incentives, now that Democrats have control over the government.
President-elect Joe Biden is set to announce plans for “trillions” in new exemption bills this week, many of which will be repaid by increasing loans.
At the same time, the Federal Reserve is content to take responsibility for fiscal policy, with Vice President Richard Clarida saying there will be no change soon to the $ 120 billion debt the Fed buys each month.
With the Fed reluctant to buy older bonds, the 10-year Treasury yields rose last week by nearly 20 basis points to 1.12%, the highest weekly increase since June.
Treasury futures lost another 3 ticks months early.
BofA’s Mark Cabana warned that the stimulus could put additional pressure on the dollar and could lead to a reduction in the Fed’s downturn later this year.
“An early Fed cut creates positive risks for our 1.5% year-over-year treasury target and supports our longer-term expectations for 3% neutral rates,” he said in a note to clients. .
The weak wage report will increase interest in US inflation, retail and consumer sentiment data.
Earnings will also be in the spotlight, as JP Morgan, Citigroup and Wells Fargo are among the first companies to release fourth-quarter results on January 15th.
The rise in yields, in turn, provided some support for the trampled dollar, which rose to 90,439 against a basket of currencies from last week’s low of 89,206.
The euro retreated to $ 1.2170 from a recent high of $ 1.2349, breaking support at around $ 1.2190. The dollar was also confirmed at 104.18 yen from a 102.57 trough hit last week.
The sharp rise in bonds undermines gold, which pays no interest, and the metal fell 1.1 percent to $ 1,828 an ounce from its recent high of $ 1,959. [GOL/]
Oil prices faced gains after hitting a one-year high on Friday, gaining 8% the following week after Saudi Arabia pledged to cut production. [O/R]
Gross futures fell 48 cents to $ 55.51, while US futures lost 28 cents to $ 51.96 a barrel.