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© Reuters. A man is reflected on a stock trading board in Tokyo
By Kevin Buckland and Matt Scuffham
TOKYO / NEW YORK (Reuters) – Asian stocks extended their rally from a two-month low on Thursday after a report on consumer prices in the United States eased concerns about inflation and raised the rate to a record close.
A regional equity index excluding Japan rose 1.7%, led by a 2.3% rise in South Korea’s Kospi, and was on track for its first three-day advance in three weeks.
China rallied 1.9%, helped by strong local loan data, while 225 gained 0.5%. E-mini futures for the US were up 0.5%.
The relative calm in the Treasury market also helped risk sentiment, with the benchmark yield settling at around 1.5% after skyrocketing to a one-year high above 1.6% last week. as investors were concerned about the US economic recovery.
“The market eased a bit with this rate consolidation,” said Masahiko Loo, a portfolio manager at Tokyo-based AllianceBernstein (NYSE :).
“The vaccine optimism is still there. People are coming back into the workforce. If you add it all up, and the bond market is not disruptive, it is providing more incentives for investors to buy stocks.”
Europe looked set to continue the global rally with a 0.2% gain after the index hit a more than a year high on Wednesday.
The European Central Bank sets its policy on Thursday and is likely to signal faster money printing to control borrowing costs, though it will go far short of adding firepower to its already aggressive pandemic-fighting package.
futures were up about 0.4%. MSCI’s Worldwide Stocks Gauge gained 0.28%.
The US Department of Labor said its consumer price index rose 0.4% in February, in line with expectations, after a 0.3% rise in January. Core CPI, which excludes volatile food and energy components, rose 0.1%, just shy of the 0.2% estimate.
While analysts largely expect inflation to rise as vaccine launches lead to a reopening of the economy, concerns persist that additional stimulus in the form of a 1.9 coronavirus aid package Trillions of dollars to be signed by the President of the United States, Joe Biden, could overheat the economy.
Investors will now be on the lookout for a 30-year debt auction on Thursday, looking to cover massive shorts. A weak seven-year auction in late February helped fuel inflation concerns and lifted yields.
“The increases in US bond yields appear to have slowed a bit after the 10-year yield reached 1.5%, although many investors remain cautious ahead of the Fed policy meeting,” Naoya Oshikubo said. , Senior Economist at Sumitomo Mitsui (NYSE 🙂 Trust Asset Management.
“The Fed has increased its rhetoric on bond yields lately. The reality is that the economy is in a K-shaped recovery, with the services sector still in difficult condition and the Fed probably wouldn’t want to allow rates to rise. of real interest “.
The dollar was weaker after the economic data.
It was almost unchanged at 91,813, following a 0.2% drop overnight.
The euro stood at $ 1.19265, while the safe-haven yen fell to $ 108.685 per dollar.
Oil prices resumed their climb after two days of declines, after the Energy Information Administration reported a larger-than-expected accumulation of storage.
futures were at $ 64.97 a barrel, an increase of 53 cents or 0.81%. futures were at $ 68.45 a barrel, an increase of 55 cents or 0.8%.
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