Asia set to follow U.S. stocks higher as dollar, bond yields ease
Asian markets were set to open higher on Friday in a holiday-lightened trading session, riding a surge of strong factory data and falling bold yields that pushed U.S. and European benchmark stock indexes to record highs.
U.S. President Joe Biden’s $2.3 trillion plan to rebuild America’s crumbling infrastructure added to the enthusiasm for risk assets, as did accelerating vaccine rollouts.
The China Financial Futures Exchange CIS 300 Index Futures index was up 1.76%, the Nikkei futures index was up 1.23% and E-Mini S&P 500 futures index was up 1.18%. Australia, New Zealand, Hong Kong and Singapore were among the Asian countries observing the Good Friday holiday.
The dollar eased off of nearly three-year highs hit in the first quarter, while U.S. crude futures rose more than 4% after the Organization of the Petroleum Exporting Countries and allies agreed to start easing production cuts in May.
U.S. crude oil prices settled up 3.52% at $61.24 per barrel and Brent was at $64.73, up 3.17%.
“Investors greeted optimistically President Biden’s infrastructure plan,” TD Securities wrote in a note to clients.
On Wall Street, the S&P 500 hit another new high as it charged past the 4,000 mark after the Institute for Supply Management said its index of U.S. factory activity soared to its highest level in more than 37 years in March.
The S&P 500 gained 1.18% to close at 4,019.87 and the Nasdaq Composite rose 1.76%, to 13,480.11. The Dow Jones Industrial Average lagged, up only 0.52%, to 33,153.21.
Earlier, Germany’s DAX index scaled a new peak after IHS Markit’s Manufacturing Purchasing Managers’ Index (PMI) showed euro zone factories were seeing their fastest pace in growth in the survey’s near 24-year history.
Long bond yields fell after the U.S. Labor Department said on Thursday that the number of Americans filing new claims for unemployment benefits unexpectedly rose last week.
Continuing a dip that began overnight in Asia, the 10-year Treasury yield was down 7.3 basis points to 1.674%.
Markets were looking ahead to March U.S. nonfarm payroll data on Friday, where more than one bank was expecting a reading above consensus of 647,000. Goldman Sachs estimates 775,000.
The dollar index fell 0.325%, with the euro up 0.01% to $1.1776.
The Japanese yen weakened 0.01% versus the greenback at 110.60 per dollar
