Shares in Asia advanced following Friday’s rally in US stocks and bonds as investors gave further credence to the idea that interest rates are near the cycle peak.
The region-wide gauge of stocks traded at their highest level in almost a month and further extended its victory streak to a fourth day of trading, with the Korean shares taking the lead in the rally. The Kospi index profited approximately 4.1% after the news on Sunday that the nation would put a ban on trading with the borrowed shares till the end of June.
Most of the Asian currencies increased against the dollar to be able to catch up to the greenback’s fall on Friday. The ten-year treasury yields rimmed higher in the Asian trading after dropping nine basis points in the previous session previously. The policy sensitive two years fell 15 basis points by the end of the last week, in the sign of the expectations of the shifting rate. Furthermore, US equity futures had been flat on Monday, following its best week this year for the S&P 500, which had rallied by 5.9%.
“There’s a bit more reason for investors to be more optimistic that the Fed is probably done with rate hikes, but one should not let one’s guard down,”
Vasu Menon, investment strategist and managing director of OCBC Bank Singapore, mentioned on Bloomberg Television.
“If the economy proves to be more resilient, if inflation proves to be more stubborn, bond yields could go up once again.”
The news of Fed cuts for the next year is at odds with the higher for longer policymakers who have outlined in the current months, setting the market and the Federal Reserve officials over a collision course.
“We think the stock market’s correction is over and that the S&P 500 is back on track to end the year at 4600,”
said the founder of Yardeni Research Inc., Ed Yardeni, on a note on Monday. This much of a level would mean a 5.5% profit by the end of 2023.
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