Asian Stocks Hold Ground Amid Global Bond Selloff and Inflation Fears
Asian stock markets held their ground on Friday despite a relentless selloff in global bonds, which pushed US yields to two-decade highs. The return of oil above $100 a barrel and concerns over inflation have bolstered bets on multiple Federal Reserve rate hikes.
The MSCI's broadest index of Asia-Pacific shares outside Japan was flat, with most markets including Chinese mainland, Taiwan, and South Korea closed for a holiday. Japan's Nikkei rose 1%, while Australia's resources-heavy shares fell 0.6%. Hong Kong's Hang Seng index skidded 1%.
The benchmark 10-year Treasury yield rose to 5.1915%, having surged 20 basis points in just two days to a new 19-year peak of 5.2251%. Thirty-year US bond yields climbed 2 basis points to 5.4805%, the highest since 2004.
Nigel Green, CEO of deVere Group, said 'The world's bond markets are screaming, and ignoring it could prove very expensive.' He warned that once risk-free rates sit above 5% in the US, every asset on the planet has to justify its price against that.