Asian markets climb despite higher US bond yields

Asian stock indexes rose on Thursday despite an unexpected jump in US bond yields that left Wall Street’s top three indexes on a slightly lower position in the previous session.

Benchmark bond yields climbed towards four-year highs, putting equity markets under pressure as sentiment began to recover slowly. The data front was rather empty on Wednesday, but participants paid attention to speeches by Federal Reserve representatives.

Chicago Fed President Charles Evans said inflationary pressure is building up faster than expected and that such trend has become evident as “positive” price-level indicators.

On Monday, world stocks came under significant pressure following US Labor data released last week, which showed a spike in average hourly earnings, rising expectations for further monetary policy adjustments by the Federal Reserve.

Also, Dallas Fed President Rob Kaplan said on Wednesday that recent volatility in stock markets is not expected to have significant implications on the health of the economy.

Separately, US congressional leaders negotiated a two-year budget pact to increase government spending by almost $300 billion. Once the deal gets green light in Congress, a new government shutdown would be officially avoided.

Both the Senate and the House are expected to vote on the bill on Thursday. The rise in fiscal spending is likely to be directed to infrastructure and military mainly.

The Cboe Volatility Index (VIX), which is nowadays the best investors' fear measure, dropped 2.3 points to 27.73, but remains still extremely high in comparison with previous months.

<<< Asian Stock Indexes at 07:50 GMT >>>

Australia ASX S&P +13.70 +0.23% 5,995.20

Shanghai Composite -47.21 -1.43% 3,262.05

Hong Kong Hang Seng +85.12 +0.28% 30,408.32

Japan Nikkei 225 +245.49 +1.13% 21,890.86

Taiwan TSEC 50 Index -23.02 -0.22% 10,528.52

<<< Next in Europe >>>

Ahead in today’s session, attention will be directed to German trade balance figures for December as of 07:00 GMT, with a 20.4 billion euros surplus seen.

Also, players will keep an eye on a speech by Buba President Weidmann (08:45 GMT) and the release of the European Central Bank Economic Bulletin (09:00 GMT).

<<< Next in the United States >>>

Today, focus will be at the release of initial jobless claims as of 13:30 GMT, with a 6,000 applications build seen. Attention will also be directed to a batch of speeches by FOMC members Kaplan (09:50 GMT), Harker (13:00 GMT) and Kashkari (14:00 GMT).

Fort Financial Services