SINGAPORE : Asian stocks slid on Friday to cap a torrid first week of the quarter for financial markets, with the dollar advancing and bonds crumbling as the resilience of U.S. jobs data has investors bracing for interest rates to head higher still.
Two-year Treasury yields burst above 5 per cent and futures pricing started to admit the possibility that the Federal Reserve will raise rates twice before the year is out. Ten-year yields rose more than 17 basis points in two sessions to 4.05 per cent, and selling wrapped around the globe as investors who had positioned for a peak in interest rates bailed out.
"Are we starting to price in the idea that there should be a higher term structure of rates? Maybe there has to be some reassessment given the resilience of a lot of economies to higher rates so far."Private U.S. payrolls jumped 497,000 last month, the ADP National Employment report showed on Thursday, against expectations for a 228,000 increase.
The euro is down 0.2 per cent on the week at $1.0889. The yen actually rose overnight and is hovering at 144 to the dollar. The Australian dollar was last at $0.6629 and eying a small weekly loss, following the Reserve Bank of Australia's decision to pause rate hikes this week. The kiwi was at $0.6161 and eyeing a modest weekly rise. [FRX/]