Asia stocks set to follow US rally; bonds slide

SYDNEY: Stocks in Asia are set to climb after beaten-down tech shares led the strongest session for US stocks in two weeks.

The dollar held gains as President Donald Trump discussed plans for further China tariff increases in the absence of a trade deal.

Futures pointed to higher opens in Japan, Australia and Hong Kong after the S&P 500 Index recovered from the worst week in a month as investors speculated a strong start to the holiday season will keep US economic growth on track, boosting retailers. Microsoft led gains in US tech leaders.

Treasuries slipped and West Texas crude rose above US$51 (RM214) a barrel, recouping some of its more than 7% slide Friday.

Positive political developments in Europe and rising oil prices added to optimism, sending the 10-year Treasury yield higher ahead of a slew of Federal Reserve speakers this week, including Chairman Jerome Powell.

Powell’s speech on Wednesday will be parsed for any hints on the prospects for a pause in the path of rate increases after traders reduced expectations for the pace of US monetary policy tightening.

Trade remains firmly in investor’s minds ahead of the upcoming Group-of-20 meeting between Presidents Xi Jinping and Donald Trump, who said he’ll likely push forward with plans to increase tariffs on US$200 billion of Chinese goods, in an interview with the Wall Street Journal published Monday.

Trump indicated he would also slap duties on all remaining imports from the Asian nation if negotiations with China’s leader Xi Jinping fail to produce a trade deal.

Elsewhere, Italy’s bonds jumped as state officials began studying scenarios for a lower 2019 budget deficit target, while European shares rose after EU leaders signed off over the weekend on the proposed Brexit plan.

Bitcoin extended its recent tumble to below US$4,000 as cryptocurrencies fell across the board.