The rebound in risk appetite in U.S. trading on Friday was noteworthy as it came despite a spike in bond yields, a 4% weekly rise in oil prices to just under $92 a barrel, and a further erosion of U.S. rate cut expectations.
Geopolitical tensions continue to bubble away too, pushing gold to a record high of $2,330 an ounce on Friday.
Will Wall Street’s feel good factor extend into Asia on Monday, or will markets feel the squeeze? The signs point to equities in a period of consolidation at the highs rather than a profit-taking run for the hills.
The S&P 500 and MSCI World indexes registered their biggest weekly losses in three months in the face of rising bond yields, but they were less than 0.8%. The MSCI Asia ex-Japan index, which is sensitive to higher U.S. yields, was even more resilient, basically ending the week flat.
Much of that resilience is down to improving economic numbers from China, and Beijing releases a batch of key indicators this week including lending, trade and inflation.
