Asia Stocks to Edge Up as U.S. Gains; Dollar Rises

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(March 22): Asian stocks looked set to nudge up after U.S. equities reached a five-month high amid optimism for less-restrictive policy in the world’s largest economy. The dollar rebounded after a four-day decline, while government bonds stabilized.

Futures pointed higher for stocks in Japan, Hong Kong, China and Australia. The S&P 500 Index staged a broad-based advance earlier that saw tech shares climbing alongside the real estate and consumer sectors, though financials continued falling for a third day. The yield on 10-year Treasuries came off the lowest level in more than a year after sharp declines in the previous session. New Zealand’s 10-year bond yield fell below 2 percent for the first time.

The MSCI index of global equities is back to its highest level since early October amid optimism that a dovish tilt from the Federal Reserve can help prolong the bull market in stocks. Bond markets are signaling worries that momentum in the global economy is fading and inflation remains subdued.

“With the start of a global easing cycle, the prospect of the resolution of the trade war, maybe some positive development on the Brexit front, we have the foundations and the catalysts for a revival of growth,” Sandip Bhagat, chief investment officer at Whittier Trust Co., told Bloomberg TV in New York. “I wouldn’t be surprised if growth, both of the earnings and economic variety, bottoms out in the first quarter. The market is now focused on the second half of 2019 where we see this revival.”

Elsewhere, sterling edged higher as EU and U.K. leaders continued to debate an unconditional delay to Britain’s exit date, postponing the risk of a messy divorce for at least a few weeks. In Brazil, stocks and the real sank after former Brazilian president Michel Temer was arrested as part of the “Carwash” corruption probe, clouding the outlook for the government’s key economic reforms.

These are the main moves in markets:

Stocks

Futures on Japan’s Nikkei 225 rose 0.7 percent in Singapore. Hang Seng futures gained 0.1 percent. Futures on Australia’s S&P/ASX 200 Index climbed 0.7 percent. The S&P 500 Index gained 1.1 percent.

Currencies

The yen was at 110.81 per dollar. The offshore yuan held at 6.7070 per dollar. The Bloomberg Dollar Spot Index rose 0.4 percent Thursday. The euro bought $1.1379, little changed. The British pound added 0.1 percent to $1.3127.

Bonds

The yield on 10-year Treasuries gained one basis point to 2.54 percent.

Commodities

West Texas Intermediate crude fell 0.6 percent to $59.87 a barrel. Gold slipped 0.1 percent to $1,308.30 an ounce. - Bloomberg