(Bloomberg) — Asian shares rose with US and European futures as lower Treasury yields bolstered the allure of holding equities. Traders are watching for any further news around President-elect Donald Trump’s planned administration.
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MSCI’s gauge of Asian shares climbed more than 1% as benchmarks rose in Japan, Australia and South Korea. Bloomberg’s gauge of the dollar headed for a third day of losses as the so-called Trump trade that had bolstered the greenback and pushed up US yields has at least temporarily lost momentum.
The gains in US stock futures suggest American equities can extend their rally after the S&P 500 and Nasdaq 100 both closed higher Monday. The Nasdaq 100 outperformed in US trading, with Tesla Inc. jumping 5.6% on a news report that Trump’s transition team is seeking to ease federal framework for fully self-driving vehicles.
“Asia equity markets are catching the tailwind from a better trading session in the US,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong. “With US rates edging lower, this is giving risk assets a little relief across the region.”
Treasury 10-year yields slipped one basis point to 4.40% in Asia after dropping three basis points in the US. The yield has come down from as high as 4.50% last week.
Trump’s transition team is considering pairing Kevin Warsh, a former Federal Reserve official, in the Treasury secretary role, with hedge fund manager Scott Bessent as director of the White House’s National Economic Council, according to people familiar with the matter.
“A more measured and experienced team in financial leadership positions in the US government will be positive for investor confidence,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management. “That has helped Asian equities and currencies.”
The yen strengthened versus all its Group-of-10 peers, paring some of its recent weakness. Japanese Finance Minister Katsunobu Kato said there was no change in the government’s stance on taking appropriate measures against excessive currency movements.
“Further sharp gains in dollar-yen can in turn prompt Japan’s Ministry of Finance to step into markets to prop up the yen,” Carol Kong, strategist at Commonwealth Bank of Australia, wrote in a research note.
The Australian dollar headed for a third day of gains after central bank minutes showed policymakers thought their current settings were appropriate to try to pull down core inflation that is still “too high.”
In corporate news, Xiaomi Corp. shares reversed earlier gains to drop as much as 4.5% in Hong Kong, as investors took profit after the company’s profit beat expectations and its co-founder raised his targets on electric vehicles.
The S&P 500 rose 0.4% on Monday, while the Nasdaq 100 climbed 0.7%. The S&P 500 will advance through the end of next year to reach 6,500 by December 2025 amid continued US economic expansion and earnings growth, according to Goldman Sachs Group Inc.’s chief equity strategist David Kostin.
Bitcoin extended its gains after rising above $91,000 Monday. The crypto currency is back in the vicinity of an all-time high, supported by a salvo of developments highlighting the deepening embrace of the digital-asset industry in the US under crypto cheerleader Donald Trump.
Oil steadied in Asia after the biggest gain in more than five weeks as the dollar weakened and a risk-on tone swept across wider markets. Brent traded above $73 a barrel after surging 3.2% on Monday, while West Texas Intermediate was near $69.
Gold extended gains as Goldman Sachs reiterated a forecast for prices to reach $3,000 an ounce next year.
Key events this week:
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Eurozone CPI, Tuesday
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US housing starts, Tuesday
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Fed’s Jeff Schmid speaks, Tuesday
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China loan prime rates, Wednesday
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Nvidia earnings, Wednesday
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Fed’s Lisa Cook and Michelle Bowman speak, Wednesday
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Eurozone consumer confidence, Thursday
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US existing home sales, initial jobless claims, Philadelphia Fed factory index, Thursday
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Eurozone HCOB Manufacturing & Services PMI, Friday
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US University of Michigan consumer sentiment, S&P Global Manufacturing & Services PMI, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.2% as of 2:14 p.m. Tokyo time
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Nikkei 225 futures (OSE) rose 0.5%
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Japan’s Topix rose 0.7%
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Australia’s S&P/ASX 200 rose 0.9%
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Hong Kong’s Hang Seng rose 0.2%
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The Shanghai Composite fell 0.6%
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Euro Stoxx 50 futures rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0588
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The Japanese yen rose 0.2% to 154.33 per dollar
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The offshore yuan was little changed at 7.2325 per dollar
Cryptocurrencies
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Bitcoin rose 0.3% to $91,642.51
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Ether fell 0.3% to $3,140.82
Bonds
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The yield on 10-year Treasuries declined one basis point to 4.40%
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Japan’s 10-year yield was unchanged at 1.065%
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Australia’s 10-year yield declined four basis points to 4.56%
Commodities
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West Texas Intermediate crude rose 0.2% to $69.28 a barrel
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Spot gold rose 0.4% to $2,622.62 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott and Alex Gabriel Simon.
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