- Asian shares mark guarded moves as global yields keep rallying, hints over US-China ties.
- Fitch kept Australia at ‘AAA’, S&P raised New Zealand to ‘AA+’.
- Vaccine optimism continues, virus numbers recede to back the unlock news.
Asia-Pacific equities struggle to track S&P 500 Futures to the south as a jump in global Treasury yields renew fears of inflation. Also challenging the sentiment could be the headlines from China suggesting a fresh war of words between Washington and Beijing. It should, however, be noted that a light calendar keeps the traders hopeful amid steady vaccinations and receding coronavirus (COVID-19) woes in the developed economies.
While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan drops 0.15% intraday while Japan’s Nikkei 225 gains 0.50% during the early Monday.
Australia’s ASX 200 struggles for clear directions below 6,800 as Fitch’s no change to a rating, with a negative outlook, joins China’s indirect warning to the US while showing efforts to renew ties with Biden administrations. It should, however, be noted that New Zealand’s (NZ) NZX 50 drops around 1.0% as S&P upwardly revised the country credit rating and offered extra fuel to the NZ bond moves.
Elsewhere, Chinese markets remain offered following the People’s Bank of China’s (PBOC) no rate change and likely tussle between America and the dragon land.
On the contrary, stocks in Hong Kong, South Korea and Indonesia stay on the front foot as global policymakers prepare for unlocking the virus-led activity restrictions. Also favoring the mood could be the headlines that the Pfizer vaccine helps to tame the covid variants from the UK and South Africa.
It’s worth mentioning that S&P 500 Futures seesaw between gains and losses following the four days of downside whereas the US 10-year Treasury yields stay bid near the highest since February 2020. Further, the US dollar index (DXY) snaps a two-day losing streak whereas commodities benefit from the risk-on mood.
Read: S&P 500 Futures snap four-day downtrend, US 10-year Treasury yields refresh yearly top on upbeat sentiment
Looking forward, global traders will keep their eyes on the US stimulus headlines while cheering the optimism concerning the covid vaccines and infection data. However, rallying Treasury yields will remain as the key cause for the equity trades as the same leads to the fears of liquidity exhaustion and tames the bulls.
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