By Stella Qiu
SYDNEY (Reuters) - Asian shares rose on Friday, buoyed by news of possible progress for China and the United States to hammer out an audit deal, while traders anxiously awaited a speech from Federal Reserve Chair Jerome Powell on rate-hike path later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.6% in early Asia trade, driven by Chinese tech shares listed in Hong Kong that surged 1.3%. Hong Kong shares of Alibaba were up 4%.
That helped the Asian index eke out a 0.4% gain for the week.
The Wall Street Journal reported on Thursday that Washington and Beijing are nearing an agreement that allows American accounting regulators to travel to Hong Kong to inspect audit records of U.S.-listed Chinese companies.
Hong Kong's Hang Seng Index rose 0.7%, Japan's Nikkei advanced 0.9%, while South Korea gained 0.5%.
Overnight on Wall Street, stocks rose while U.S. Treasury yields slipped, as investors digested comments from Fed officials who continued hammering the point they will drive rates up and keep them there until inflation has been squeezed from the economy.
The S&P 500 climbed 1.4% and the Nasdaq gained 1.67%, lifted by gains in Nvidia and other technology-related stock.
"So it is a fair bet that the Powell speech will take a similar turn today," said Robert Carnell, regional head of Research, Asia-Pacific, at ING.
"If so, the most likely market reaction would be a rise in yields at both the front and back of the yield curve, a sell-off in equities and dollar strength as markets seem to have been positioning themselves for a more supportive set of comments."
Investors have pared back expectations the Fed could tilt to a slower pace of rate hikes as U.S. inflation remains at 8.5% on an annual basis, well above the Fed's 2% target. But Powell's speech due on Friday will be scrutinised for any indication that an economic slowdown might alter the Fed's strategy.
Interest rate futures now imply a 60% chance of a 75 bp Fed hike in September.
"The experience of Jackson Hole 2021 will make the Fed Chair cautious in making the same error twice. That itself argues against his messaging looking too far forward, or, erring on the dovish side," said Alan Ruskin, macro strategist at Deutsche Bank.
"Markets have however largely taken this on board, which risks a small, short-lived 'buy the rumour, sell the fact' technical bond rally, sell the USD, and relief equity trade."
In the currency markets, the dollar was little changed against a basket of major currencies. The commodity-exposed Australian and New Zealand dollars fell 0.4% versus the greenback after a strong rebound in the previous day.
The yield on benchmark 10-year Treasury notes were up slightly to 3.0425%, compared with its U.S. close of 3.024% the previous day.
The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 3.3803%, compared with a U.S. close of 3.374%.
Oil prices recovered some ground on Friday after slumping by about $2 a barrel in the previous session on the possible return of sanctioned Iranian oil exports and on worries from rising U.S. interest rates.
Brent crude rose 0.5% in early Asia trade to $99.87 per barrel and U.S. crude was up by a similar margin to $96.01 a barrel.
Gold was slightly lower. Spot gold was traded at $1755.4698 per ounce. [GOL/]
(Editing by Sam Holmes)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app