Asia Stocks Drift; U.S. 10-Year Yield Through 3.1%

Stocks in Asia drifted as Treasury yields climbed above 3.1 percent, raising concerns about the appetite for riskier assets. The pound rose on a report that Britain might have reached agreement on its approach toward European customs union.

Positive momentum from the U.S. session carried through only to some markets in Asia, with equities rising in Japan, and falling in Australia and Korea. Hong Kong dropped, though Tencent Holdings Ltd. surged after reporting a record profit. FTSE 100 futures edged lower. The 10-year U.S. Treasury yield ticked higher to extend recent gains. The pound got a boost from a Telegraph report that the U.K. will tell the European Union it’s prepared to stay in the customs union beyond 2021. Oil traded above $71 a barrel, while the dollar headed lower.

Signs that the world’s largest economy will continue to pick up steam comforted some investors who have had to contend with surging U.S. bond yields, geopolitical tensions from Asia to the Middle East and worries about global trade. Still, markets remain sensitive to fresh uncertainty about the U.S.-North Korea summit and mixed signals from the Trump administration on China trade talks, as well as interest rates heading higher.

In Asia, the rupiah gained and stocks rose ahead of a Bank Indonesia meeting. Economists are anticipating a quarter-point boost to the benchmark policy rate, to 4.5 percent, in part to offer support to the weakening rupiah.

Elsewhere, The Australian dollar got ticked higher after employment rose more than forecast. New Zealand’s currency advanced after that nation forecast a budget surplus. The S&P 500 Index rose above its 100-day average and the Russell 2000 Index hit an all-time high.

These are some key events to watch this week:

U.S. jobless claims are due Thursday.

Cleveland Fed President Loretta Mester speaks on monetary policy at an ECB conference in Frankfurt on Thursday.

Chinese Vice Premier Liu He is expected in Washington for more trade talks.

These are the main moves in markets:

Stocks

Topix index gained 0.5 percent at the close in Tokyo.

S&P/ASX 200 Index fell 0.4 percent.

Kospi index lost 0.4 percent.

Hang Seng Index declined 0.4 percent.

S&P 500 Index futures fell 0.1 percent.

FTSE 100 Index contracts were 0.1 percent lower as of 7:02 a.m. London time.

Currencies

The Bloomberg Dollar Spot Index fell 0.2 percent, while remaining near its high for the year.

The pound jumped 0.6 percent to $1.3562.

The euro rose 0.2 percent to $1.1829.

The yen rose less than 0.1 percent to 110.32 per dollar.

Bonds

The yield on 10-year Treasuries was at 3.1038 percent after gaining two basis points on Wednesday.

Australia’s 10-year bond yield rose two basis point to 2.90 percent.

The German 10-year bund yield rose more than one basis point to 0.62 percent.

Commodities

West Texas Intermediate crude added 0.3 percent to $71.77 a barrel.

Gold added 0.1 percent to $1,292.10 an ounce, still near the weakest in 20 weeks.

LME copper rose 0.4 percent to $6,853 a metric ton.

Source: Bloomberg