Treasury Bonds Rise While Stocks Are Predicted to Fall Back-to-Back – Asia Market Wrap

Global government bonds and Treasuries rallied into Asia, fuelled by dismal US economic data and mounting geopolitical concerns. Stocks were poised for a second consecutive day of losses.

Treasuries extended their gain across the curve, with the benchmark 10-year yield falling nearly 1bps to 4.14%. Bonds in Australia rallied as the central bank indicated that officials would be cautious about future interest-rate rises. New Zealand’s federal debt also increased.

Japan’s bond futures continued to rise after the lowest price at a 30-year debt auction was somewhat higher than expected, despite a low bid-to-cover ratio.

Asian equities lost 0.6%, while equity-index futures for the US and Europe fell further. Platinum and silver led losses among precious metals, while oil edged up as the US took greater steps to exercise control over Venezuela.

Thursday’s moves mirrored advances in gilts and German government bonds, as dismal economic data drove traders to strengthen their bets on rate reduction, balancing the potential of further debt sales. Global bond sales are off to their busiest start to a year in history, as borrowers of all stripes capitalise on investors’ unquenchable desire for risk.

Meanwhile, gold declined for a second day, ahead of an annual rebalancing of commodities indexes that might result in the sale of billions of Dollars in futures contracts over the next few days.