(Bloomberg) -- Asian shares look set to rise after Treasury yields slipped from multiyear highs, helping US stocks to their best week since June.
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Equity futures for Japan, Australia and Hong Kong climbed earlier while most major currencies advanced versus the dollar early Monday amid positive risk sentiment. Contracts for US stocks rose.
The pound led gains as Boris Johnson pulled out of the race to lead the UK’s ruling Conservative Party, putting Rishi Sunak closer to becoming the next prime minister.
More broadly across markets, investors are looking beyond the present state of aggressive monetary tightening by the Federal Reserve to the next phase, which may see a slowing or pause in interest-rate hikes. That’s providing support amid headwinds from the war in Ukraine to risks from China.
Traders in Asia will also be weighing the conclusion of the party congress in Beijing, which saw Xi Jinping tighten his grip on power. The outcome suggests his Covid-zero campaign will continue to weigh on the economy and has also fueled speculation that his “common prosperity” goal may even lead to property and inheritance taxes.
The S&P 500 jumped 2.4% Friday amid an increase in appetite for bullish US equity wagers following an equity rout that’s already erased $13 trillion in market value this year.
Ten-year Treasury yields reversed an earlier surge Friday, closing down by one basis point at 4.22%. Yields declined in Australia Monday, led by a drop of about 10 basis points in the policy-sensitive three-year maturity.
St. Louis Fed President James Bullard and his San Francisco counterpart Mary Daly made clear they expect the discussion at the November gathering to include debate on how high to raise rates and when to slow the pace of increases. They stressed the need to keep tightening for now.
The yen weakened versus the dollar Monday but held most of the rally it made Friday. The Nikkei reported that Japanese authorities had intervened the market again.
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.9% as of 7:02 a.m. Tokyo time. The S&P 500 rose 2.4% Friday
Nasdaq 100 futures rose 1.2%. The Nasdaq 100 rose 2.4%
Nikkei 225 futures 0.9%
Australia’s S&P/ASX 200 Index futures 1.4%
Hang Seng Index futures 1.2%
Currencies
The euro rose 0.2% to $0.9878
The Japanese yen fell 0.3% to 148.03 per dollar
The offshore yuan was little changed at 7.2334 per dollar
The British pound rose 0.8% to $1.1392
Cryptocurrencies
Bitcoin fell 0.1% to $19,469.79
Ether rose 0.2% to $1,332.35
Bonds
The yield on 10-year Treasuries declined one basis point to 4.22% on Friday
Australia’s 10-year bond yield fell three basis points to 4.17%
Commodities
West Texas Intermediate crude rose 0.3% to $85.32 a barrel
Spot gold rose 0.3% to $1,661.95 an ounce
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