Asian stocks edged higher on Tuesday as U.S. bond yields declined and the dollar retreated from recent highs, signaling cautious optimism among investors. Markets are closely monitoring President-elect Donald Trump’s cabinet announcements and the evolving outlook for Federal Reserve policy.
Tech stocks led gains in Asia, mirroring Wall Street’s partial recovery from last week’s sell-off. However, Nvidia’s upcoming earnings report on Wednesday kept investors wary.
In monetary policy, traders pared bets for a December Federal Reserve rate cut to less than 59%, down from 62% the previous day, reflecting concerns that resilient U.S. economic data and Trump’s proposed fiscal policies might dampen the Fed’s ability to ease rates.
Regional Market Movements
- Japan’s Nikkei rose 0.2% by 0129 GMT.
- South Korea’s Kospi and Australia’s equity benchmark each added 0.1%.
- Hong Kong’s Hang Seng climbed 0.8%, while mainland blue chips advanced 0.3%.
- U.S. S&P 500 futures pointed slightly lower following a 0.4% gain in the cash index on Monday.
MSCI’s global stock index snapped a four-day losing streak, reflecting improved sentiment.
Dollar, U.S. Yields and Commodities
The dollar index hovered near Monday’s low at 106.12, after hitting a one-year peak of 107.07 last Thursday. It weakened by 0.35% against the yen but firmed slightly against the euro at $1.0591.
U.S. Treasury yields extended declines:
- Two-year yield: 4.278%
- Ten-year yield: 4.412%
Bitcoin stabilized at $90,960 after surging to a record high of $93,480 last week on optimism about cryptocurrency regulation under Trump.
Safe-haven gold was flat at $2,614.80, following a 2% jump on Monday driven by escalating geopolitical tensions.
Geopolitical and Crude Oil Updates
Tensions rose as the Biden administration approved Ukraine’s use of U.S.-made weapons for strikes deep into Russia, prompting warnings from the Kremlin about potential NATO confrontation.
This heightened tension, coupled with a power outage at Norway’s Johan Sverdrup oilfield, pushed oil prices higher:
- Brent crude: $73.37/barrel (+7 cents)
- WTI crude: $69.26/barrel (+8 cents)
