Treasuries Decline on Powell Comments, Chinese Equities Recover – Asia Market Wrap

Treasuries fell, extending Friday’s selloff after Fed’s Powell said policymakers will likely wait beyond March before cutting interest rates. Chinese stocks swung after signals of official support.

The “risk of moving too quickly is that the job’s not quite done,” Powell said in an interview on CBS’s 60 Minutes, which aired Sunday in the United States. US 10-Yr rates gained roughly five basis points in Asia after rising 14 BPS on Friday in response to stronger-than-expected Payroll data.

The Treasury’s declines sent waves through Asian bond markets, dragging on government debt in Australia and New Zealand. Chinese government bonds were an outlier, with 10-Yr rates falling around two basis points.

Hong Kong and mainland China stocks recovered from earlier losses after the China Securities Regulatory Commission issued another statement Monday, promising to closely monitor and take effective measures to prevent stock pledging risks. On Sunday, the commission said it would act to prevent abnormal fluctuations and guide more medium- and long-term funds into the market.

Benchmarks in Australia and South Korea fell, as did US equity futures, after the S&P 500 Index gained 1.1% to a new record on Friday. The strong run of performance for the US benchmark comes as February begins, often one of the most volatile months of the year for US markets.