Bond Rout Deepens Ahead of U.S. Jobs Report

The rout in global government debt continued ahead of the U.S. jobs report, with Treasuries heading for their longest slump in more than 40 years. South Korea’s currency fluctuated and its stock market climbed after President Park Geun-hye was removed from office.

Australian 10-year bond yields extended their advance as rates on similar-dated Treasuries rose for a 10th day, which would be the longest streak since 1974. The yen fell past 115 per dollar, buoying Japanese stocks, as the dollar clung to gains. Stocks gained in Australia and India, while property shares spurred a rebound in Singapore. Chinese shares traded in Hong Kong declined. Gold slid below $1,200 per ounce, dropping for a fifth day, its longest losing run since October. Oil climbed from a three-month low but remained below $50 a barrel.

Friday’s American jobs report is the last major piece of economic data before the Federal Reserve meets next week, with markets poised for a rate increase. The ECB signaled it won’t add to stimulus as growth picks up. In China, central bank governor Zhou Xiaochuan said the yuan should be relatively stable this year even as higher U.S. interest rates lead to volatility.

Here are the main market moves:

Currencies

· The yen fell 0.4 percent to 115.43 per dollar as of 3.32 p.m. in Tokyo.

· The Bloomberg Dollar Spot Index was steady, holding this week’s 0.8 percent advance. All 16 major currencies are down this week versus the greenback, led by the real and the rand.

· South Korea’s won fluctuated following initial gains that came after a court affirmed parliament’s decision to impeach Park. The ruling means she must immediately leave the Blue House in Seoul and triggers a presidential election within 60 days.

Stocks

· The Topix index climbed 1.2 percent, the most in a week. The MSCI Asia Pacific index was up 0.5 percent, with gainers outnumbering decliners by 584 to 370. Australia’s S&P/ASX 200 Index rose 0.6 percent.

· Hong Kong’s Hang Seng rose 0.2 percent and the Shanghai Composite Index was little changed, while the Hang Seng China Enterprises Index was down 0.4 percent following Thursday’s 1.8 percent drop.

· Singapore’s Straits Times Index jumped 0.5 percent after authorities announced a reduction in property stamp duty and total debt servicing.

· India’s S&P BSE Sensex added 0.1 percent after most exit polls showed Prime Minister Narendra Modi’s party leading in the race for power in the state of Uttar Pradesh.

· Futures on the S&P 500 were unmoved. The gauge advanced 0.1 percent on Thursday and the Stoxx Europe 600 Index rose the same.

Bonds

· The yield on the U.S. Treasury note due in a decade was up one basis point at 2.61 percent. It climbed five basis points Thursday to exceed the 2.6 percent mark that Bill Gross, the bond-market veteran at Janus Capital Management, said will signal the start of a bear market, should it hold on a weekly basis.

· The yield on Australian 10-year bonds rose five basis points to 2.97 percent.

Commodities

· WTI crude rebounded 0.8 percent to $49.66 per barrel after dropping on Thursday by 2 percent to its lowest close since Nov. 29.

· Gold traded at $1,197.86 per ounce, extending this week’s slide to 3 percent, its biggest weekly drop since November. The precious metal has been retreating from February’s highs as expectations for U.S. rate hikes dampens its appeal.

· Copper for three-month delivery rose 0.4 percent to $5,715 a metric ton on the London Metal Exchange, snapping a six-day slide.


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