Bond Yields Set for Weekly Advance, Euro Dips

Benchmark bond yields are headed for the biggest weekly advance since September as investors contemplate prospects for continued economic growth and reduced central bank stimulus.

Asian stocks advanced after U.S. benchmarks closed higher, with Japan’s Topix index heading for its biggest weekly rise in two months amid thin trading. The euro dropped after Catalan separatist parties triumphed in regional elections, extending Spain’s political trauma. Treasuries came off their lows of the week, though 10-year yields remain near 2.5 percent after touching the highest levels since March. Bitcoin fell as much as 15 percent, extending its loss from its intraday high this month to more than 30 percent.

While stocks from the U.S. to Asia initially dropped in wake of the U.S. Congress passing sweeping tax-cut legislation, equities rediscovered their reflationary cheer as the week wound down.

The dollar was little changed, and oil was trading above $58 a barrel. The Bloomberg Commodity Index headed for a weekly advance, closing at the highest in more than two weeks Thursday.

U.S. Treasuries halted declines Thursday, when a $14 billion sale of five-year inflation-linked notes saw the strongest demand since August 2012. European bond yields rose for a fourth session.

These are the main moves in markets:

Stocks

· Japan’s Topix Index was up 0.4 percent at the close in Tokyo, while the Nikkei 225 Stock Average rose 0.2 percent.

· Hong Kong’s Hang Seng Index climbed 0.3 percent, and the Shanghai Composite Index was little changed.

· Futures on the S&P 500 Index were little changed. The main gauge advanced 0.2 percent to 2,684.57 Thursday.

Australia’s S&P/ASX 200 Index was up 0.2 percent

Currencies

The yen was little changed at 113.35 per dollar.

The euro dropped 0.2 percent to $1.1847.

· Australia’s dollar was at 77.15 U.S. cents, heading for a second straight week of gains. New Zealand’s dollar is also up for a second week.

The Bloomberg Dollar Spot Index was little changed.

Bitcoin was 11 percent down at about $13,700.

Bonds

· The yield on 10-year Treasuries was little changed at 2.48 percent after sliding two basis points Thursday. That’s up from 2.35 percent at the end of last week.

· Australia’s 10-year government bond yields rose for a fifth session, to 2.70 percent, up about 18 basis points from last Friday.

Commodities

· West Texas Intermediate crude was down 0.3 percent at $58.19 a barrel after climbing 0.5 percent on Thursday.

Gold was at $1,267.21.

Source: Bloomberg

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