Asian Stocks Set to Track US Higher as Bonds Gain: Markets Wrap

(Bloomberg) — Asian equities are poised to track Wall Street stocks higher as Treasuries halted a selloff that drove 10-year yields near 4.5%. Traders were also closely watching news around President-elect Donald Trump’s administration.

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Sydney shares rose, while futures showed benchmarks in Tokyo and Hong Kong gaining. US contracts were steady in early trading. The Nasdaq 100 outperformed after its longest rout since January, with Tesla Inc. up 5.6% on a news report Trump’s transition team have told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities. Nvidia Corp., which reports results this week, fell.

Bonds rose across the US curve, reversing a move that earlier drove 30-year yields to their May highs. Australia’s 10-year yield fell in early trading Tuesday.

“Traders appear to be gauging the potential impact of a new Trump administration’s policies on the economy, and the possibility that the Fed may slow down its rate-cutting campaign,” said Chris Larkin at E*Trade from Morgan Stanley. “With a relatively light economic calendar this week, the focus will shift to earnings — especially Nvidia’s, which have the potential to dictate the market’s short-term momentum.”

The S&P 500 rose 0.4% on Monday. The Nasdaq 100 climbed 0.7%. The Dow Jones Industrial Average fell 0.1%.

Treasury 10-year yields declined three basis points to 4.41%. The Bloomberg Dollar Spot Index slid 0.4%. Bitcoin topped $91,000.

Investors in Asia will be gauging whether Monday’s rebound for equities in China and Hong Kong following last week’s selloff can be sustained. Traders are reassessing the outlook for further stimulus and the country’s guidance on boosting corporate valuation.

Wall Street brokerages including Morgan Stanley and Goldman Sachs Group Inc. have turned more cautious on Chinese stocks as persistent deflationary pressures and geopolitical tensions cloud the outlook for earnings in the world’s second-largest equity market.

Oil edged lower after surging on Monday amid simmering geopolitical tensions. West Texas Intermediate rose 3.2% to settle above $69 a barrel after the US gave Ukraine the green light to use long-range missiles inside of Russia, amping up tensions between the warring nations.