Asian Shares Climb on Wall Street Rally as Treasury Yields Test Highs
Market Overview and Key Drivers
By Stella Qiu
SYDNEY, Oct 6 (Reuters) - Asian stocks rose on Tuesday after a tech-fuelled rally lifted the Nasdaq to a record close, with a retreat in oil prices offering further support even as longer-dated Treasury yields hovered near multi-decade highs.
Currency and Oil Market Movements
The euro languished near 17-month lows after briefly touching $1.116 overnight, pressured by mounting fiscal concerns in France. Investors dumped French government bonds after an underwhelming budget, while political uncertainty deepened after Spanish Prime Minister Pedro Sanchez called a snap election.
Brent crude was little changed at $100 a barrel after losing 1.9% overnight as exports from the Middle East increased and the Group of Seven nations pledged to boost supplies. [O/R]
Stock Market Performance
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2%, while Japan's Nikkei gained 0.7%. European stock futures climbed 0.5%.
Nasdaq futures edged up 0.2% and S&P 500 futures rose 0.1%. The Nasdaq notched up a record close overnight, buoyed by softer-than-expected jobs data that dampened expectations for a rate hike from the Federal Reserve this month. [.N]
Technology Sector Highlights
AI heavyweight Nvidia climbed 2.1%, reaching a record-high close and boosting its market value to $5.76 trillion.
"The rally in the market was tech led once again, with the marginal easing of interest rate uncertainty along with a slight moderation in geopolitical risk allowing market participants to focus on the extraordinary earnings growth being delivered by AI names," said Kyle Rodda, a senior analyst at Capital.com.
Upcoming Earnings Season
The third-quarter earnings season kicks off next week. Goldman Sachs estimated consensus forecasts point to 27% growth in S&P 500 earnings last quarter, with more than half that growth from companies benefiting from AI infrastructure spending.
Latin American Markets
Latin American markets also climbed, led by a rally in Brazilian stocks and the real currency, after right-wing Senator Flavio Bolsonaro outperformed poll predictions in the first round of the presidential election and advanced to a runoff against leftist incumbent Luiz Inacio Lula da Silva.
Bond Market Developments
BOND ROUT PERSISTS
The relentless climb in Treasury yields continued even as markets scaled back bets for an interest rate rise this month from the Federal Reserve to just 23% from 71% a week ago, after top policymakers stressed the need for more data before tightening again.
US Treasury Yields
US 10- and 30-year Treasury yields hit fresh 24-year highs overnight, capping a steady climb since mid-August driven by inflation and debt concerns. An ISM survey showed a measure of prices paid by services businesses for inputs jumped to the highest level in more than four years.
The 10-year Treasury yield was steady in Asia at 5.3089%, after climbing 3 basis points overnight to hit 5.3493%, the highest since 2002, while 30-year yields held at 5.6622%, having briefly reached 5.7029% overnight.
European Bonds and Currency
The selloff in French bonds calmed a little, with the premium investors demand to hold French 10-year bonds over safer German debt narrowing to 137 basis points on Monday.
The euro nursed losses at $1.1215, after falling as much as 0.8% to $1.116 overnight, its weakest since May 2025. It traded at 177 yen, having been down for seven straight sessions, around the lowest since November last year.
"Deep divisions in France’s parliament raises the risk that the proposed fiscal consolidation is diluted or that the government faces a no-confidence vote," said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia.
"EUR/USD will likely test support at 1.1109."
That kept the US dollar firm, with the dollar index at 102.2 after a weekly rise of 0.9%.
Commodities Update
Spot gold was little changed at $4,141.31 an ounce. [GOL/]
(Reporting by Stella Qiu; Editing by Sonali Paul)
