Asian stocks rose Thursday as U.S.-China talks helped sentiment and bolstered the offshore yuan. Treasuries rallied ahead of a U.S. inflation report that may provide clues on the monetary policy outlook.
Japanese, Chinese and Hong Kong shares advanced along with U.S. equity contracts. The S&P 500 again flirted with a record before slipping, continuing a pattern of range-bound trading also evident at a global level.
The offshore yuan climbed after the Chinese and U.S. commerce ministers agreed to push forward trade and investment links in their first call since the start of President Joe Biden’s administration. Separately, Biden revoked Trump-era bans on TikTok and WeChat. He ordered a review of software apps from foreign adversaries and action against those that pose a security risk.
The 10-year Treasury yield extended a slide below 1.5%, signaling support for the view that the rebound from the pandemic will stoke only a transient bout of elevated inflation. Australia’s 10-year yield declined. The dollar was steady.
Traders are waiting to see if the upcoming U.S. inflation print changes perceptions of when the Federal Reserve might begin talks about tapering asset purchases. Global equities for now are hovering around an all-time high. Meme-stock frenzy and gyrations in cryptocurrencies are among the few sources of pronounced volatility.
