Treasury Selloff Eases as Oil Drops & Stocks Climb - Asia Market Wrap

Global bonds began to stabilize in Asia after a sharp two-day selloff drove yields to multi-decade highs. The US 10-year Treasury yield slipped one basis point to around 5.19% after rising more than 20 bps over the previous two sessions, while the two-year yield eased to about 4.90%. Oil also pulled back, with Brent falling around 0.8% to roughly $105.70 a barrel after gaining more than 7% over the previous two sessions. US and Iranian negotiators were reported to be discussing a phased agreement that could involve Tehran reopening the Strait of Hormuz and Washington lifting its blockade of Iranian ports. Improving sentiment helped equities recover, with MSCI’s Asia Pacific index rising around 0.3% and Japan leading gains while markets in South Korea, Taiwan and mainland China were closed for holidays. US equity-index futures pared earlier losses, while European contracts also pointed higher. Oil prices and bond yields remained key market drivers as elevated energy costs continued to reinforce inflation concerns and expectations for further Fed tightening. Interest-rate swaps were pricing around three additional quarter-point hikes over the next year, while Australian and New Zeala