© Reuters. ARCHIVE PHOTO: A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes in Shanghai
By Hideyuki Sano and Matt Scuffham
TOKYO / NEW YORK (Reuters) – Asian stocks rebounded from a two-month low on Wednesday after bond yields fell after a well-received auction and Chinese stocks found a balance after recent sharp declines due to concerns about tightening policies.
The stock index of MSCI, ex-Japan Asia-Pacific, rose 0.4%, a day after reaching a two-month low. Mainland China’s A shares CSI300 index rose 0.7% at the start of trading.
The recovery came after Chinese stocks fell to their lowest levels since mid-December of the previous day, with the prospect of tighter policy and a slowdown in the economic recovery.
little has changed, while e-mini futures fell 0.25%, erasing previous gains.
“The markets are paying full attention to the bonds. As earnings are not growing so fast now, the high stock prices we have now will become unsustainable if bond yields increase further and undermine their appreciation,” said Hiroshi Watanabe , senior economist at Sony (NYSE 🙂 Financial stakes.
Yield on 10-year benchmark notes fell to 1.539%, peaking at 1.626% on Friday, after Tuesday’s $ 58 billion auction of 3-year US notes was well received.
However, many market investors remained nervous, with the next tests of the investor’s appetite for government debt later this week in the form of 10- and 30-year auctions.
“Although the bond market has stabilized somewhat, the pressures will remain,” said Naokazu Koshimizu, senior rate strategist at Nomura Securities.
“He set the price for the future normalization of the Fed’s monetary policy, making the Fed’s policy eventually neutral. But he has not yet set the price for the chance of his policy becoming more rigid.”
Some investors see real risk from an overheated American economy and higher inflation based on planned spending by the Biden government, including a $ 1.9 trillion stimulus and an even greater infrastructure initiative.
On Wall Street, each of the major averages closed higher, led by a nearly 4% gain at Nasdaq, giving the high-tech index its best day since November 4.
The index has been highly susceptible to bullish rates, and Monday’s decline has left it more than 10% below the close of February 12, confirming what is widely considered a correction.
“Today, the 10-year span has dropped a little bit and that takes the pressure off the ratings, so the technology is performing well. The market is almost getting comfortable with this level of rates,” said Kristina Hooper, chief strategist global market share in New York.
The faster implementation of COVID-19 vaccines in some countries and the planned US stimulus package have helped to sustain a brighter global economic outlook, said the Organization for Economic Cooperation and Development, by raising its growth forecast to 2021.
In foreign exchange markets, the bank retreated from a 3-1 / 2 month high from 92.506 to 92.138.
The euro strengthened at $ 1.1881, on Tuesday’s 3 1/2 month low of $ 1.18355, while the yen changed hands at 108.76 per dollar, above the nine-month low of 109.235 set Last day.
The offshore has strengthened to 6.5235 per dollar, since Tuesday’s low at 6.5625.
Oil prices retreated, easing concerns about a disruption to supplies in Saudi Arabia.
futures fell 0.3% to $ 63.72 a barrel, away from a nearly two and a half year high of $ 67.98 played on Monday.
futures settled at $ 67.52 per barrel, down 72 cents or 1.06%.