By Wayne Cole
SYDNEY (Reuters) – Asian shares made a quiet start to the week on Monday as higher Treasury yields challenged equity prices on Wall Street while supporting the U.S. dollar near multi-month highs.
The rolls were easy with the New Year holiday coming up and a blank data diary this week. China has its PMI factory survey on Tuesday, while the US ISM survey for December is due on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2%, but is still 16% higher this year. reduced by 0.9%, but remains on track for gains of around 20% by 2024.
South Korea's main index has not been so lucky, caught in a storm of political uncertainty in recent weeks, and has posted a 9% loss this year. It ended with 0.3%.
Shares of South Korean budget carrier Jeju Air hit a record low on Monday, following a plane crash that killed 179 people.
China's greenbacks added 0.3%, up nearly 16% on the year with almost all of that gain coming just two weeks into September after Beijing promised more stimulus.
EUROSTOXX 50 futures firmed at 0.1%, while and were little changed.
and Nasdaq futures were both off 0.1%. Wall Street experienced a broad sell-off on Friday with no apparent cause, although volumes were two-thirds of the daily average. (.N)
25% for the year and the Nasdaq 31%, which stretches prices compared to the risk-free return of Treasuries. Investors are counting on earnings per share to grow just over 10% in 2025, compared to an expected increase of 12.47% in 2024, according to LSEG data.
However, the yield on the 10-year Treasury is close to an eight-month high of 4.631% and ends the year about 75 basis points above where it began, although the Fed is moving 100 basis points to reduce monetary rates.
“The continued rise in bond yields, driven by a reassessment of expectations for restrictive monetary policy, is causing concern,” said Quasar Elizundia, a research analyst at broker Pepperstone.
“The possibility that the Fed may maintain restrictive monetary policy longer than expected could dampen expectations of earnings growth for 2025, which could impact investment decisions.”
Bond investors may be wary of rising yields as President-elect Donald Trump promises tax cuts and few concrete proposals to curb the budget deficit.
Trump is expected to release at least 25 executive orders when he takes office on Jan.
The increase in interest rates kept up demand for the US dollar, which gave a 6.5% annual gain to the basket of major currencies.
The euro has lost more than 5% against the dollar so far in 2024 to date at $1.0427, not far from two years ago at $1.0344.
The dollar held close to a five-month high in the yen at 157.79, and the risk of Japanese intervention to prevent another test of the barrier of 160.00.
Dollar strength has been a drag on gold prices, although the metal is still 28% higher this year to $2,624. (GOAL/)
Oil has had a tough year as concerns about demand, particularly from China, have kept a lid on prices and forced OPEC+ to repeatedly extend the deal to cut supply. (O/R)
rose 6 cents to $74.23 a barrel, while added 1 cent to $70.61 a barrel.