Asia: Stocks track US gains; treasuries steady

[SYDNEY] Asian stocks extended a global equity rally Tuesday as investors shook off concerns about the impact of higher bond yields. Treasuries were steady.

Stocks saw modest gains in Japan and Australia, and surged in South Korea which reopened after a holiday. S&P 500 futures ticked higher following a broad-based rally in US equities overnight.

Earlier, the US benchmark notched its biggest advance in almost nine months and the Nasdaq Composite jumped almost 3 per cent. Benchmark Treasury yields were little changed after ticking higher Monday. The dollar was steady against most major peers.

Oil slipped back to trade around the US$60 a barrel level ahead of a key Opec+ meeting this week that may return more supply back to the market. After the close of regular trading, Zoom Video Communications rose as its revenue forecast topped Wall Street's estimates.

Investors piled back into risk assets following a selloff triggered by concern that massive stimulus as well as progress in battling the coronavirus have left some areas of the economy at risk of possibly overheating.

Traders are priming themselves for how Federal Reserve officials slated to speak this week might respond to the recent tumult in bond markets.

"There's nothing wrong with longer term interest rates where they are; financial conditions broadly are still fairly easy," said Julia Coronado, founder of MacroPolicy Perspectives LLC.

"Given the stabilization we've seen since Thursday, the Fed can breathe a sigh of relief." On the virus front, while cases are falling and vaccinations are accelerating, health officials are closely monitoring new variants of the virus and World Health Organization Officials warned for a rebound in infections as countries ease restrictions.

Elsewhere, Bitcoin rallied after a volatile weekend session, riding a broad resurgence in risk assets and a bullish report from Citigroup. The bank's strategists laid out a case for the digital asset to play a bigger role in the global financial system, saying the cryptocurrency could become "the currency of choice for international trade" in the years ahead.

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