Stocks shrug off rates risk as U.S. consumers spend

Singapore, Feb. 16 (BNA): Asian stocks rose, as investors chose to cheer strong US retail sales data as good news for earnings rather than worry that it could support higher interest rates.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5%, its best session in more than a month, with technology shares up 4% in Hong Kong.

Japan’s Nikkei rose 0.7%. European futures rose 0.5%, Reuters reported.

The mood pushed the dollar off six-week highs against the yen, yuan and New Zealand, though only slightly as bond and currency markets were more focused on the implications for interest rates.

Benchmark 10-year Treasury yields, which rise when bond prices fall, hit their highest levels since early January, before easing slightly to 3.786%.

US retail sales increased by the most in nearly two years in January – up 3%, against expectations for a 1.8% rise – as Americans spent freely despite higher borrowing costs.

These numbers came on the heels of stronger-than-expected employment data and with more-than-expected inflation.

Stocks — with the Nasdaq (.IXIC) up 15% so far this year — are clinging on to the positives, while investors in interest rate markets are quickly abandoning hopes for cuts later in 2023.


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