(Bloomberg) -- A rally in global stocks looks set to continue in Asia as equity investors showed signs of warming to a world with inflation and a quicker pace of tightening for U.S. monetary policy following this month’s slide in risk assets.
The MSCI All-Country World Index of equities jumped the most since April on Wednesday and futures for share gauges in Japan, Hong Kong and Australia all pointed to gains to kick off Thursday. The yield on the 10-year Treasury rose as high as 2.91 percent, continuing its steady advance from last year’s low of 2.01 percent in early September. The dollar tumbled and gold surged.
Bond traders increased their expectations for the number of Federal Reserve interest-rate hikes to four by the end of next year after a report showed U.S. consumer prices rose in January more than projected. Stocks remain cheap relative to bonds and won’t be affected by higher long-term interest rates as long as the 10-year Treasury yield stays below 4 percent, according to Gina Martin Adams and Peter Chung, equity strategists at Bloomberg Intelligence.
China, South Korea, Taiwan, Vietnam markets are closed Thursday.
South Africa’s rand headed for its strongest level against the dollar in almost three years as President Jacob Zuma resigned under pressure from the ruling African National Congress.
Terminal users can read more in our markets blog.
Here are some important things to watch out for this week:
- Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21.
- Australia releases January employment data on Thursday.
- Earnings season continues in full swing.
These are the main moves in markets:
Stocks
- Futures on Japan’s Nikkei 225 Stock Average rose 1.3 percent in Chicago trading.
- Futures on Hong Kong’s Hang Seng Index added 0.3 percent.
- Futures on Australia’s S&P/ASX 200 Index advanced 1 percent.
- The S&P 500 rose 1.3 percent Wednesday, when the Stoxx Europe 600 Index increased 1.1 percent.
- The MSCI All-Country World Index gained 1.3 percent Wednesday.
Currencies
- The Bloomberg Dollar Spot Index fell 0.8 percent.
- The euro rose 0.8 percent to $1.2452.
- The yen climbed 0.8 percent to 107 per dollar.
- South Africa’s rand jumped 2.4 percent to 11.6869 per dollar.
Bonds
- The yield on 10-year Treasuries rose eight basis points to 2.91 percent.
- Australia’s 10-year yield rose eight basis points to 2.93 percent.
Commodities
- West Texas Intermediate rose 2.5 percent to $60.68 a barrel.
- Gold rose 1.6 percent to $1,350.72 an ounce.
