Asian stocks advanced Tuesday after their U.S. counterparts notched further all-time highs as investors awaited second-quarter earnings season. Treasury yields were steady after a solid U.S. debt sale.
An MSCI gauge of the region’s stocks rose for a second day, with Hong Kong outperforming. Shares in Taiwan touched an intraday record high. U.S. futures fluctuated after the S&P 500 and tech-heavy Nasdaq 100 closed at new highs.
Investors are also focusing on the U.S. inflation report and Federal Reserve Chair Jerome Powell’s testimony this week as policy makers prepare to discuss tapering stimulus as the economy recovers from the pandemic.
The U.S. Treasury sold $58 billion of three-year notes at yields slightly higher than before the auction. A sale of $38 billion of 10-year notes was greeted by stronger demand. The dollar dipped against most major peers.
Expectations for a solid earnings season are underpinning the stock rally, as investors ponder how central banks will unwind the support driving the recovery from the pandemic. Still, inflationary pressures remain a concern, as does the spread of the delta variant and a slowdown in vaccination rates. In the Philippines, the peso and stocks declined, and bond spreads widened after Fitch Ratings changed the sovereign credit outlook to negative from stable.
