In This Article:
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* U.S. 10-yr yields reach 12-month peak of 1.38%
* Shares regain some ground, wary of higher yields
* Sterling, commodity currencies on the rise
* Oil resumes climb, metals lead "real" assets higher
By Wayne Cole
SYDNEY, Feb 22 (Reuters) - Asian share markets inched up onMonday as expectations for faster economic growth and inflationglobally battered bonds and boosted commodities, though risingreal yields were making equity valuations look more stretched incomparison.
MSCI's broadest index of Asia-Pacific shares outside Japanadded 0.2%, after slipping from a record toplast week as the jump in U.S. bond yields unsettled investors.
Japan's Nikkei recouped 1.0% and South Korea0.4%, but Chinese blue chips lost 1.2%.
S&P 500 and EUROSTOXX 50 futures were bothhesitating around flat, while FTSE futures fell 0.6%.
Bonds have been bruised by the prospect of a strongereconomic recovery and yet greater borrowing as President JoeBiden's $1.9 trillion stimulus package progresses.
"Yield curves have continued to steepen, as COVID infectionrates decline further, reopening plans are discussed and a largeU.S. fiscal stimulus package looks likely," said ChristianKeller, Barclays' head of economics research.
"This in principle signals a better medium-term growthoutlook for the U.S. and beyond, as other core yields curves aremoving in the same direction," he added. "Meanwhile, centralbanks seem set to look through this year's inflation increase,keeping the curves' front end anchored."
Federal Reserve Chair Jerome Powell delivers his semi-annualtestimony before Congress this week and is likely to reiterate acommitment to keeping policy super easy for as long as needed todrive inflation higher.
European Central Bank President Christine Lagarde is alsoexpected to sound dovish in a speech later Monday.
Yields on 10-year Treasury notes have already reached 1.38%, breaking the psychological 1.30% level and bringingthe rise for the year so far to a steep 43 basis points.
Analysts at BofA noted 30-year bonds hadreturned -9.4% in the year to date, the worst start since 2013.
"Real assets are outperforming financial assets big in '21as cyclical, political, secular trends say higher inflation,"the analysts said in a note. "Surging commodities, energylaggards in vogue, materials in secular breakouts."
A COPPER-PLATED RECOVERY
One of the stars has been copper, a key component ofrenewable technology, which shot up 7.7% last week to anine-year peak. Even the broader LMEX base metal index climbed5.5% on the week.