Stocks Gain in Asia as Jump in Bond Yields Extends: Markets Wrap

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Stocks Gain in Asia as Jump in Bond Yields Extends: Markets Wrap(Bloomberg) -- Stocks in Asia edged higher following a late rally in U.S. equities. The sovereign bond sell-off extended to the region, driving up Australian yields.Japan, South Korea and Australia saw equities advance. Futures on the S&P 500 Index were steady after U.S. equities closed little changed Tuesday, with stocks erasing losses in late trading as the recent trend of selling growth shares and buying value continued. Chinese assets will be in focus after the country removed a foreign investment limit in its capital markets. Treasury yields held firm after the 10-year rate hit 1.73%.With investors awaiting the European Central Bank’s policy decision on Thursday and the Federal Reserve’s next week, some are dialing back expectations for more aggressive central bank accommodation. The bond sell-off is intensifying, with Treasury yields extending gains after hitting a three-year low earlier this month.The recent pullback in the bond rally “is a correction to an outsized move in yields during August, not a turn in the trend,” Kit Juckes, chief global FX strategist at Societe Generale SA, wrote in his daily note. “Last Friday’s U.S. labor market data show, clearly enough for me, that the U.S. economy is slowing slowly but steadily as the global trade slowdown infects it.”Elsewhere, Apple suppliers in Asia will be in focus after the company unveiled its new iPhone lineup.Here are some key events coming up this week:OPEC’s monthly oil market report, which includes demand forecasts and production estimates, is due Wednesday.The ECB policy meeting Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference.U.S. data for August is due on producer prices Wednesday, and CPI Thursday.These are the main moves in markets:StocksJapan’s Topix index rose 0.4% as of 9:02 a.m. in Tokyo.South Korea’s Kospi index added 0.6%.Futures on the S&P 500 were flat after the index closed little changed.Australia’s S&P/ASX 200 Index advanced 0.2%.CurrenciesThe yen was at 107.58 per dollar.The offshore yuan was flat at 7.1106 per dollar.The Bloomberg Dollar Spot Index was little changed.The euro bought $1.1048.BondsThe yield on 10-year Treasuries remained at 1.73% after rising nine basis points Tuesday.Australian 10-year yields climbed about six basis points, to 1.14%.CommoditiesGold rose 0.1% to $1,487.70 an ounce.West Texas Intermediate crude advanced 0.9% to $57.93 a barrel.\--With assistance from Cameron Crise, Vildana Hajric and Sarah Ponczek.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Andreea PapucFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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