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Shares rose in Asia after stocks and bonds rallied on Wall Street, bringing some relief to financial markets after a series of punishing losses. Traders’ focus now turns to Friday’s US jobs data.
Australian, Japanese and South Korean stocks all climbed. Oil ticked higher after sliding the most in a year on Wednesday. The opening gains for Asian stocks added a bullish pulse to the region after a gauge of regional equities fell into a technical correction — a decline of more than 10% from their recent high — during Wednesday’s session.
The S&P 500 rose 0.8% in New York, its biggest gain in almost three weeks, while the Nasdaq 100 advanced 1.5%, its best day since August. US equity futures held to tight ranges in early Asian trading. Mainland China markets remain shut for a week-long holiday.
Australian and New Zealand bonds gained from the open, mirroring Wednesday’s moves in Treasuries. Yields on 10- and 30-year US government debt fell six basis points in US trading, paring a run of steep increases. The selloff in longer-maturity Treasuries has rivaled some of the most notorious market meltdowns in US history.
“We are going all in on long-duration, high-grade bonds,” Adam Coons, chief portfolio manager at Winthrop Capital Management, said on Bloomberg Television. “We are really at an inflection point where interest rates in the US just can’t go up that much higher.”
The easing of Treasury yields was helped by economic data that prompted traders to scale back forecasts for Federal Reserve tightening this year.
US companies added the fewest number of jobs since the start of 2021 in September, according to a survey from the ADP Research Institute in collaboration with Stanford Digital Economy Lab. A separate report from the Institute for Supply Management showed the services sector pulled back modestly last month to the lowest level this year. Those data releases come ahead of Friday’s nonfarm payrolls figures, which are forecast to show a slowdown in activity.
‘Oversold Market’
Bill Gross, co-founder and former chief investment officer of Pacific Investment Management Co., said retail investors that hold bonds in exchange-traded funds were adding to the pressure in Treasury markets over the past week. “We are seeing a little bit of oversold market” as 10-year Treasury yields approach 5%, he said in an interview with Bloomberg Television.
Traders will be keeping a close eye on the yen, after the currency spiked higher Tuesday following its slide beyond 150 per dollar. The surge prompted speculation Japanese officials had intervened to prop up the yen, but early indications show that may not have been the case.
Elsewhere in Asia, inflation data in South Korea overshot estimates. Doosan Robotics Inc. began trading in Seoul after South Korea’s largest initial public offering this year. Chinese property developers are also in focus as Sunac China Holdings Ltd. faces court proceedings Thursday on its multibillion-dollar offshore debt restructuring plan.
In commodities, West Texas Intermediate rose 0.4% after slumping 5.6% Wednesday to settle below $85 a barrel. The decline reflected concern over flagging demand for the commodity as higher interest rates and a strong dollar weigh on the global economy.