Asian stocks rally on good economic mood as Treasuries stabilize By Reuters

By Stanley White and Koh Gui Qing

TOKYO / NEW YORK (Reuters) – Asian stocks rose slightly on Wednesday as investors ignored fears that stocks may have rebounded too much too quickly over the past year, and instead focused on the optimism that a more imminent recovery in the United States would boost the global economic recovery.

The largest MSCI index of Asia-Pacific stocks outside of Japan rose 1.12%. Australian stocks rose 0.82%, while the stock index rose 0.45%. Chinese stocks rose 1.27%.

E-minis rose 0.36%.

The pan-region rose 0.35%, German 0.36% and futures contracts 0.55%.

Wall Street retreated overnight after the start of March with a bang, staging its best one-day rally in nine months on Monday.

But some analysts have warned that fears that stock prices could be foamy, a fear echoed on Tuesday by a senior Chinese regulator, could make it harder for stock markets to hang on to the gains. Fears that last week’s liquidation of US Treasuries, which rocked stock markets, could resume, could also put a damper on stock prices, they said.

“As markets have stabilized … the tone remains muted as investors continue to fear another drop in rates,” TD Securities analysts said in a note.

Cautiousness weighed on the US dollar, which has benefited in recent days from investors’ hopes that the US will benefit from a faster economic recovery and that the US central bank will be more tolerant of higher bond yields.

The stood at 90.787, reversing a loss of 0.2% from the previous session.

The Australian dollar, which benefited from bets on an acceleration in global trade, was supported after stronger than expected economic growth in the fourth quarter that fueled hopes of a V-shaped recovery from the coronavirus pandemic.

Benchmark U.S. government bond yields fell again for the third day in a row as investors suspended a recent sell-off ahead of a series of U.S. economic data to be released later this week. The yield stood at 1.4086%, down from last week’s high of 1.614%.

The US stock market was troubled last week when benchmark yields hit a one-year high on investors’ bets that a strong rebound in the US economy amid ultra-soft monetary backdrop could fuel inflation .

U.S. Federal Reserve officials, however, said inflation fears were premature and warned that rising yields could tighten financial conditions and hamper economic recovery.

The largest MSCI index of global equities edged up 0.19%.

Oil prices rebounded slightly from a two-week low overnight on expectations that OPEC + producers will ease supply brakes at their meeting later this week as the economies are starting to recover from the coronavirus crisis.

U.S. West Texas Intermediate crude rose 0.15% to $ 59.85 a barrel, while futures contracts rose 0.33% to $ 62.91.

The cryptocurrency bitcoin erased the first losses and rose 0.96% to $ 48,979. Digital assets have grown 69% so far this year as it is increasingly accepted in mainstream financial circles.