Stock slide pauses in Asia

The retreat in Asian stocks from historic highs triggered by concerns about outsized gains took a pause on Thursday. Australian bonds climbed after a rally in Treasuries spurred in part by the global equities sell-off.

Benchmarks in Japan fluctuated after the Topix index on Wednesday recorded its biggest drop since March. Australia’s benchmark opened little changed. The S&P 500 Index pared the worst of Wednesday’s losses as bank shares rallied, but that wasn’t enough to overcome the biggest drop in two months for U.S. equities. The gap between two-year and 10-year U.S. yields shrank to a fresh low for 2017, a potential concern given how a flattening in the yield curve has sometimes served as a precursor to an economic downturn.

U.S. inflation data did little to alter the likelihood of the Federal Reserve lifting interest rates again next month, as core prices picked up in October, and retail sales indicated resilient demand heading into the holiday shopping season. In the Asia-Pacific region, Australia reported a smaller gain in jobs than forecast for October. Next up: a rate decision in Indonesia.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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