Asian Stock Market: Bulls and bears jostle as bond rout catches a breather

• Asian equities trade mixed as US Treasury yields drop the most in two weeks.
• Turkish President’s move, BOJ’s Kuroda and Fed’s Barkin entertain traders amid a light calendar.
• Virus resurgence, vaccine jitters and fears of reflation keep bulls in check.

Asian shares trade mixed on early Monday as US bond bears catch a breather. However, the coronavirus (COVID-19) resurgence in the European Union (EU) and the vaccine jitters between the EU and the UK probe the market optimism.

Also on the risk-negative side could be the Fed’s readiness to let the Supplementary Leverage Ratio (SLR) concession expire as planned at the end of March. Furthermore, Turkish President Recep Tayyip Erdoğan’s sacking of Central Bank of the Republic of Turkey (CBRT) Governor Naci Abgal adds to the pessimism.

While portraying the same, MSCI’s index of Asia-Pacific shares outside Japan gains 0.15% but Japan’s Nikkei 225 drops near 2.0% following mostly downbeat comments from BOJ Governor Haruhiko Kuroda. It should, however, be noted that the People’s Bank of China’s (PBOC) status-quote helped stocks in Beijing and Australia but not from New Zealand (NZ) amid economic concerns following last week’s NZ GDP.

Moving on, markets in South Korea, Indonesia and India were flashing mild losses amid the latest jump in the local covid cases. Though, the losses were limited amid sustained push for easy money from China and the US Treasury yields’ drop.

On a broader scale, S&P 500 Futures alternate losses with gains after two consecutive days of losses. However, the US 10-year Treasury yields decline the most since March 09 while flashing a fall of five basis points (bps) declines to 1.682%.

Given the multiple speeches by Fed policymakers up for publishing amid the US session, investors will keep eye on the US central bankers’ mood. Also important will be the covid and vaccine headlines as well as the Turkish trades’ reaction to the sacking of CBRT Governor and how markets perceive the incoming leader Sahap Kavcioglu, an ex-banker and ruling party lawmaker.