SYDNEY (Reuters) – Asian equities rose on Monday as some semblance of calm returned to bond markets after last week’s frantic action, while progress on the huge US stimulus package went support optimism about the world economy and raised oil prices.
China’s official manufacturing PMI over the weekend lost forecasts, but Japanese figures showed the fastest growth in two years. Investors also have optimistic news of a series of U.S. data to be delivered this week, including the February payroll report.
The feeling of help was the delivery of news about the recently approved Johnson & Johnson COVID-19 vaccine that should start on Tuesday.
MSCI’s broader Asia-Pacific stock index outside of Japan rose 1%, after losing 3.7% last Friday.
The Japanese Nikkei rose 2.1%, while Chinese blue chips added 0.8%.
NASDAQ futures bounced 1.2% and S&P 500 futures 0.8%. EUROSTOXX 50 futures and FTSE futures rose 1.0%.
U.S. 10-year bond yields held at 1.40%, from last week’s high of 1.61%. Last week they rose 11 basis points to 50 basis points from the year so far.
“Good Friday moves still feel like a pause for air, rather than being a catalyst for moving toward calmer waters,” said Rodrigo Catril, chief strategist at NAB.
“Market participants remain nervous about the prospect of higher inflation, as economies try to reopen thanks to the deployment of vaccines, high levels of savings and strong fiscal and monetary support.”
BofA analysts noted that the bond market was now one of the worst recorded with the annualized 10-year US government bond price yield falling 29% since last August , with a decline of 19% in Australia, 16% in the United Kingdom and 10% in Canada. .
The defeat was largely due to expectations of faster U.S. growth, as the House approved President Joe Biden’s $ 1.9 trillion coronavirus relief package and sent it to the Senate. .
BofA US economist Michelle Meyer raised her economic growth forecast to 6.5% for this year and 5% next year, due to the likelihood of a further stimulus package. great, best news on the virus front and encouraging data.
U.S. virus cases have also dropped 72 percent since the Jan. 12 peak and hospitalizations are following closely, BofA added.
U.S. higher yields combined with the overall shift toward security helped the dollar index rebound to 90,787 from the seven-week low of 89,677.
On Monday, the euro remained stable at $ 1.2083, compared to last week’s peak of $ 1.2242, while the dollar remained close to the six-month high of the yen at 106 , 60.
“Riskier” and commodity-exposed currencies rebounded slightly after being beaten late last week, with the rise of the Australian and Canadian dollars and emerging market currencies from Brazil to Turkey looking more stable.
Non-yielding gold still suffered losses after hitting a low of eight months on Friday in its worst month since November 2016. It was last at $ 1,750 an ounce, just above a boom of about $ 1,716.
Oil prices widened their gains ahead of an OPEC meeting this week where supply could rise. Brent gained 4.8% last week and WTI 3.8%, while both were about 20% higher than February as a whole.
Brent rose last $ 1.11 to $ 65.53, while US crude rose $ 1.04 to $ 62.54 a barrel.
Edited by Shri Navaratnam and Lincoln Feast.