Bond selloff deepens

Follow Us Get the newsletter Surging yields wreak havoc in markets. The U.S. calls on China to deliver trade promises. Australia and New Zealand show the world what a post-virus recovery looks like. Here are some of the things people in markets are talking about today. Bond Rout Asian stocks looked set for losses Friday after a selloff in global bonds deepened, wreaking havoc across markets. The dollar jumped. Futures pointed over 1% lower in Australia, Japan and Hong Kong. A poorly received Treasury auction saw the 10-year benchmark surge as much as 23 basis points to 1.6%. The selloff accelerated as holders of mortgage securities were forced to offload government bonds. Australian bonds slumped in early Asian trading. Tech shares led losses in U.S. stocks, which saw the S&P close down 2.5%. The Nasdaq 100 tumbled 3.6%, the most since October, as investors rotated away from pandemic-era winners toward companies poised to benefit from an end to lockdowns. Still, stocks popular with the day-trader crowd surged once again, with GameStop doubling at one point before ending 19% higher. Keep Your Promises President Joe Biden's nominee for trade chief called on China to live up to the commitments in its trade pact with the U.S. — the strongest signal yet that the new administration plans to build on the accord brokered by its predecessor rather than scrap it. During her confirmation hearing, Katherine Tai, the pick for U.S. trade representative, said the Biden administration needs to be "exploring all our options" and that China "needs to deliver" on its trade promises. Tai is widely expected to be easily confirmed. Her process- and consultation-driven approach is welcomed after four years of chaos under Donald Trump. Paid Post Companies Leading the Rise of Cybersecurity If we're lucky, cybersecurity can feel like an afterthought – something working in the background. This perception confronts the reality that with an ever-growing number of online threats, the cybersecurity theme is driven by dozens of highly innovative companies. We recently profiled four of the key players. Global X ETFs Watch Closely Australia and New Zealand are showing the world what a post-virus recovery may look like. Their relative success in suppressing Covid-19 is proving the theory that pent-up demand will drive a speedy rebound. There's been a snap-back in household and business sentiment, spurring activity and hiring and laying the ground for a sustained recovery. Cashed-up households, which spent little during lockdowns were quick to return to eating out, with numbers continuing to grow as rules are wound back. With vaccines being rolled out across the developed world, a return to normal is tantalizingly within reach. India's Exit As India's economic fortunes stand at the cusp of a turnaround, a spike in coronavirus cases across its key business centers risks undoing some of the gains. Data due later Friday will probably show gross domestic product expanded 0.6% in the three months ended December, after contracting for two consecutive quarters, according to the median forecast in a Bloomberg survey of economists. India will become one of the few major economies to post growth in the last quarter of 2020, with any improvement in the economy's performance inversely tied to a drop in Covid-19 infections. Reserves Up Central banks in Asia's emerging economies added $467.7 billion to their foreign-exchange reserves last year, the most since 2013. The increase reflects intervention in foreign-exchange markets and positive valuation effects that pushed total holdings to $5.74 trillion. That provides Asia with an important buffer against a recent jump in global bond yields, which have historically triggered currency volatility and driven up borrowing costs. China's reserves are the still world's biggest, but the bulk of last year's increase came from the rest of Asia, with the Reserve Bank of India has been intervening heavily to boost its reserves. What We've Been Reading This is what's caught our eye over the past 24 hours: Trump's tax returns have arrived at the New York prosecutor's office. The world's biggest wealth fund draws a dot-com parallel with ESG. India's beating China at its own game with vaccine diplomacy. Warren Buffet to finally speak up after holding his tongue in 2020. Used electric car batteries are heading to farms and factories. Seoul may elect its first female mayor as scandal stirs Moon's party. Mr. Potato Head goes gender neutral.  And finally, here's what Cormac's interested in today Investors looking for a cheap way to play the next pandemic — or preferably just a more hygiene conscious post-Covid world — should take a look at two of last year's superstar stocks. As my colleagues Chan Tien Hin and Abhishek Vishnoi pointed out Wednesday, a rout in Malaysian glove makers is deepening, sending valuations for some to rock-bottom levels. Top Glove, the world's biggest, has slumped over 20% this month and is now trading on just 6-times forward earnings. It surged 300% last year. Supermax, which jumped almost 800% in 2020, is down about 26% this month and trades at under 5 times earnings. The stocks are being sold off amid encouraging news on vaccines and hopes many economies can soon reopen. But strategists continue to believe the companies' prospects remain strong and point to attractive dividend yields as another kicker. While nobody wants to return to a world where glove stocks are as en vogue as they were last year, the cheap valuations suggest they are at least worthy of further analysis for anyone building a pandemic-proof global portfolio. Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo.   Like getting this email?  Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and gain expert analysis from exclusive subscriber-only newsletters. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.   You received this message because you are subscribed to Bloomberg's Five Things - Asia newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022