Asia stocks set to fall, pressured by soaring T-note yields

FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City
Elizabeth Dilts Marshall
·2 min read

By Elizabeth Dilts Marshall

NEW YORK (Reuters) - Asian stocks are set to open mostly lower on Friday, pressured by U.S. Treasury yields that rose to 14-month highs overnight and oil prices, which fell by their biggest one-day declines since last summer.

Australia's S&P/ASX 200 index lost 0.21% in early trading, and Hong Kong's Hang Seng index futures lost 0.72%.

In Japan, where the central bank will meet on Friday, the Nikkei 225 futures added 0.08%. E-mini futures for the S&P 500 rose 0.21%.

The yield on the U.S. 10-year Treasury note on Thursday rose above 1.75% for the first time in 14 months after the Federal Reserve pledged to look past inflation and keep interest rates near 0% until at least 2024, then ticked lower after the release of mixed economic data.

The jump in yields accelerated a move out of growth stocks with the tech-heavy Nasdaq falling more than 3%. [.N]

The benchmark S&P 500 fell from record highs while MSCI's gauge of stocks across the globe shed 0.71%.

Oil prices tumbled, falling for a fifth day in a row, on growing worries about rising COVID-19 cases in Europe as several large economies have had to reimpose lockdowns.

France's prime minister imposed a month-long lockdown on Paris and parts of the north after a faltering vaccine rollout and spread of highly contagious coronavirus variants forced President Emmanuel Macron to shift course.

A rally in the dollar, which was supported by higher U.S. bond yields, also pressured oil prices, as a stronger dollar makes oil more expensive for holders of other currencies.

Brent crude futures settled down $4.72, or 6.9%, at $63.28 a barrel, while U.S. crude oil futures settled at $60 a barrel, down $4.60, or 7.1%.

On Wall Street, the Dow Jones Industrial Average fell 153.07 points, or 0.46%, to 32,862.3, the S&P 500 lost 58.66 points, or 1.48%, to 3,915.46 and the Nasdaq Composite dropped 409.03 points, or 3.02%, to 13,116.17.

The pan-European STOXX 600 index rose 0.40%.

Benchmark 10-year notes US10YT=RR last fell 21/32 in price to yield 1.7135%, from 1.641% late on Wednesday.

The U.S. dollar rallied across the board, as higher Treasury yields helped it recoup losses from the previous session.

The dollar index rose 0.482%, with the euro up 0.02% to $1.1917.

The Australian dollar rose 0.08% versus the greenback at $0.776.

(Reporting by Elizabeth Dilts Marshall in New York; Editing by Matthew Lewis)