Asian stocks were mixed Tuesday and Treasury yields held a retreat amid concerns the economic recovery from the pandemic is losing momentum. Shares in China and Hong Kong edged lower, still feeling the effects of Beijing’s clampdown on private industries.
Internet giant Tencent Holdings Ltd. slumped on fears the authorities will set their sights on online entertainment next. Japan also declined. S&P 500 and Nasdaq 100 contracts posted modest gains while European futures declined. The spread of the delta Covid-19 variant and signs of robust but softer U.S. manufacturing growth contributed to an overnight S&P 500 dip.
The 10-year U.S. Treasury yield remained below 1.20% after falling as low as 1.15%. The real yield on 10-year Treasuries — which strips out the expected impact of inflation — was close to a record low. Oil held a plunge as the virus and indications of a slower Chinese economic rebound hurt the outlook for consumption.
New Zealand’s dollar jumped on policy tightening bets. Australia’s currency advanced after its central bank kept a plan to taper bond purchases despite a protracted lockdown in Sydney. The months-long advance in Treasuries for some commentators points to worries that a weaker period lies ahead for the economic reopening from the health crisis. [BLOOMBERG]
