TOKYO- Asian stocks rose on Tuesday while US bond yields and the dollar hung back from multi-month highs as traders awaited President-elect Donald Trump’s cabinet selection and sought to gauge the outlook for Federal Reserve easing.
Tech shares advanced, tracking Wall Street’s recovery from last week’s steep losses although Nvidia’s upcoming earnings on Wednesday limited the scope for big moves.
Markets have pared bets for a quarter-point interest-rate cut at the Fed’s next meeting in December to less than 59 percent, down from 62 percent a day earlier and more than 65 percent a week ago, according to CME FedWatch.
Trump’s mooted fiscal spending, higher tariffs and tighter immigration are seen as inflationary by analysts, potentially impeding Fed rate cuts, which are already being hampered by a run of resilient economic data.
Trump has begun making appointments, filling health and defense roles last week, but key positions for financial markets – Treasury secretary and trade representative – have yet to be announced.
Japan’s Nikkei added 0.2 percent while South Korea’s Kospi and Australia’s equity benchmark each ticked up 0.1 percent.
Hong Kong’s Hang Seng climbed 0.8 percent, and mainland blue chips gained 0.3 percent.
US S&P 500 futures pointed slightly lower, but following a 0.4 percent advance overnight for the cash index
MSCI’s index of world stocks snapped a four-day losing streak on Monday.
“With a lack of data and a lull in market moving news…the marginal driver of asset prices right now is how the incoming Trump administration will impact economic conditions, international trade and global geopolitics,” said Kyle Rodda, senior financial markets analyst at Capital.com.
“Concurrently, the markets are trying to estimate how those policies will impact interest rate settings, especially the Fed, with the markets walking back the depth of rate cuts previously discounted into the curve.” US Treasury yields extended overnight declines, with the two-year yield ticking down to 4.278 percent and the 10-year yield edging down to 4.412 percent.