This is CNBC’s live blog covering Asia-Pacific markets.
Stocks in the Asia-Pacific were set to trade mixed on Tuesday, after Wall Street extended losses as investors digested last week’s economic data that showed there’s more room for the Federal Reserve to hike rates further.
In Australia, the S&P/ASX 200 fell 0.1% as investors await Reserve Bank of Australia’s rate decision. Economists polled by Reuters are expecting a 25 basis point hike. Australia’s traded data is also slated to be released later in the day.
The Australian dollar strengthened slightly to last trade at 0.6891 against the U.S. dollar.
The Nikkei 225 gained 0.34% and the Topix rose 0.31% as the Bank of Japan reportedly plans to submit nominees for its next governor to parliaments next week, according to Kyodo. The Kospi in South Korea also rose 0.27% and the Kosdaq gained 0.6%.
In corporate earnings, Japan’s Softbank Group, Nintendo will report third quarter earnings. South Korea’s SK Innovation and KB Financial Group will also publish its quarterly results. Yum China will also release its fourth quarter and full year results.
The Nasdaq Composite led losses overnight as investors grew increasingly cautious of rising bond yields. The Dow Jones Industrial Average and the S&P 500 also closed lower. Treasury bond yields rose overnight, with the benchmark 10-year yield up by nearly 11 basis points at 3.64%.
– CNBC’s Alex Harring, John Melloy contributed to this report
Stocks close down Monday
Stocks ended Monday in the red as concerns over high bond yields weighed on investors.
The tech-heavy Nasdaq Composite led the three major indexes down, losing 1% in the session. The S&P 500 ended down 0.6%, while the Dow shed 0.1%.
— Alex Harring
Goldman cuts recession probability to 25%
Goldman Sachs, which already was doubtful of Wall Street’s recession expectations, thinks there’s even less of a chance now.
The firm cut its recession probability for the next 12 months to 25%, down from 35% previously. That’s well below the 65% expectation from the most recent Wall Street Journal survey.
“Continued strength in the labor market and early signs of improvement in the business surveys suggest that the risk of a near-term slump has diminished notably,” the firm said in a client note Monday.
GDP is likely to grow just 0.4% in the first quarter but then accelerate through the year, Goldman added.
Bond yields are popping higher. This is how investors can play them
Treasury yields jumped on Monday as investors awaited clues from Federal Reserve speakers on the next steps for monetary policy.
The yield on the 1-year T-bill leapt as high as 4.841% Monday morning, and the rate on the 2-year note jumped to 4.412%. These are the highest levels since Jan. 6. Yields on longer-dated Treasurys ticked higher, too, with the rate on the 10-year note climbing as high as 3.619%, the highest level since Jan. 10. Bond yields move inversely to prices.
Yields have been trending higher since the Fed embarked on its rate-hiking campaign last year, and bond prices tumbled. However, an opportunity has since opened for investors hoping to snap up these fixed-income instruments on the cheap and collect an attractive yield.
Read more on where advisors are looking to play the rising rate environment here.
-Darla Mercado, Gina Francolla