Asian Stocks Climb Amid China Rally; Bonds Steady: Markets Wrap

Asian stocks advanced amid a rally in China on Thursday after modest gains in the U.S., where a tame inflation report helped to keep Treasury yields and the dollar in check.

China’s CSI 300 index rallied the most in about two months, extending a rebound as the nation’s key week-long legislative meeting concludes. Technology stocks led a wider Asian rally. U.S. equity futures increased after the S&P 500 rose for a second day, with financial and materials shares leading as the rotation to value resumed. Nasdaq 100 contracts outperformed.

Ten-year Treasury yields held well below their recent one-year highs, as the market turned its attention from Wednesday’s tepid auction to the 30-year reopening Thursday. The dollar was flat. Crude climbed toward $65 a barrel. Bitcoin traded around $56,000.

Weaker-than-expected consumer price inflation data Wednesday eased concerns about the U.S. economy overheating, and helped to further stall the rising trend in bond yields. The mood remains cautious on high-priced growth stocks, which suffered most as yields rose, while cyclical shares continue to benefit from optimism about the recovery as the U.S. stimulus package goes into effect.

“It’s not inconsistent to have high yields with stocks going up if growth expectations are the driver and not inflation,” Angela Mwanza, senior vice president at UBS Wealth Management, said on Bloomberg TV. “All the indications we are getting from the central banks is exactly that, that this is good news.”

Aside from the U.S. bond auction, investors are also focused on the outlook for Europe’s recovery, with the central bank due to deliver its policy statement.

Here are some key events to watch:

The U.S. government auctions 30-year Treasuries Thursday.The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.

These are the main moves in markets:

Stocks

S&P 500 futures rose 0.4% as of 1:18 p.m. in Tokyo. Nasdaq 100 futures rose 0.6%. The S&P 500 Index climbed 0.6%.Japan’s Topix index was little changed.Australia’s S&P/ASX 200 index shed 0.2%.Hong Kong’s Hang Seng Index rose 1.6%.South Korea’s Kospi index added 2%.China’s CSI 300 rose 2.1%.Euro Stoxx 50 futures rose 0.2%.

Currencies

The yen was at 108.51 per dollar, down 0.1%.The offshore yuan traded at 6.5028 per dollar.The Bloomberg Dollar Spot Index was flat after sliding 0.3%.The euro was at $1.1927.

Bonds

The yield on 10-year Treasuries edged up to 1.53%.The yield on 10-year Australian bonds fell four basis points to 1.67%.

https://finance.yahoo.com/news/asia-stocks-set-muted-open-220525114.html

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