Asia stocks hold near highs, yields up on United States stimulus plans
- by Johnnie Parks
- in Money
- — Jan 13, 2021
Dollar rises again, bitcoin tumbles as much as 21%.
The action along the curve meant the spread between the 2-year and 10-year yields steepened to an nearly four-year high of more than 103 basis points.
Global coronavirus infections stood at more than 90 million as countries struggle with the pace of vaccinations.
Stocks on Wall Street slipped ahead of the start of an earnings season that arrives with equities at record highs, and as House Democrats introduced an article of impeachment against President Donald Trump.
The Dow Jones Industrial Average fell 62.98 points, or 0.2%, to 31,034.99, the S&P 500 lost 21.92 points, or 0.57%, to 3,802.76 and the Nasdaq Composite dropped 146.83 points, or 1.11%, to 13,055.15.
More news: Britain expected to ban China imports linked to Uighur campsWith Asian stock markets also lower, MSCI's gauge of stocks across the globe shed 0.65% after closing at a record high on Friday.
The spread between the 2-year and 10-year Treasury yield brushed against 100 basis points to hit its steepest since July 2017.
Asian shares paused near historic highs on Monday while Treasury yields were at a 10-month top as "trillions" in new USA fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade.
Meanwhile, on Friday, January 9, the rupee gained seven paise against the USA dollar on to close at 73.24, tracking an intense rally in domestic equities, while also reflecting a sharp recovery from the day's lowest level.
Ordinarily, the extra spending plans would force investors to worry about rising inflation and its detrimental effect on the U.S. Dollar in a weak economy, but the currency has been supported in recent weeks thanks to rising U.S. yields.
More news: FBI Warns of Plans for Nationwide "Armed Protests" Ahead Of, During InaugurationUSA gold futures gained 0.8 percent to $1,849.70. The dollar also gained 104.18 yen after a low of 102.57 reached last week. Rising market volatility and demand for safe-haven currencies could be exacerbating US Dollar buying pressure as well.
In the worldwide market, Spot Gold was steady at $1,845.19 per ounce as Asian stocks traded lower (ahead of Indian market's opening), dragged by political unrest in Washington and rising global COVID-19 cases, outweighing a firmer dollar and US Treasury yields.
USA crude recently fell 0.1% to US$52.19 per barrel and Brent was at US$55.61, down 0.68% on the day.
The sudden lift in bond yields undermined gold, which pays no interest, and the metal fell back 1.1% to $1,828 an ounce from its recent peak of $1,959. Silver fell 1.66% to $24.95. Gold last week recorded its biggest percentage fall since late November. At its session low, the cryptocurrency fell 21% on Monday.
More news: Covid-19: Malaysian king declares state of emergency to fight virus
