Asian stocks reach 29-month top, China services surprisingly strong

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Asian shares notched a 29-month high on Monday as investors wagered monetary and fiscal policies globally would stay super stimulatory, while an upbeat reading on China's service sector augured well for continued recovery there.

The Nikkei had dipped on Friday after Prime Minister Shinzo Abe’s resignation stirred doubts about future fiscal and monetary stimulus policies.

Attention was now on a host of Federal Reserve officials that are set to speak this week, kicking off with Vice Chair Richard Clarida later Monday as they put more flesh on the bank’s new policy framework The risk of higher inflation in the future, assuming the Fed can get it there, was enough to push up longer-term Treasury yields and sharply steepen the yield curve.

That shift was of little benefit to the U.S. dollar given the prospect of short rates staying super-low for longer, and the currency fell broadly.

 

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