Asia Markets: Asian markets get off to a slow start

Asia-Pacific stock markets were relatively quiet Monday following a late-week pullback in U.S. equities.

There were more indexes with declines than gains in morning trade, but moves in either direction were almost all within 0.3% in Japan NIK, -0.34%  , Hong Kong HSI, -0.18%   and South Korea SEU, -0.19%  .

One exception was the Taiex Y9999, -0.48%  , which was down 0.5%, as Taiwan Semiconductor Manufacturing 2330, -1.09%   fell 1.3%.

Yields on 10-year Treasurys were recently at 2.965% in Asia after settling at 2.949% on Friday, the highest late New York level since January 2014.

Shorter-term Treasurys have seen even faster price declines this year, resulting in yield spreads narrowing to levels not seen in a decade.

Standard Chartered expects two-year yields to be at the same level as 10-years by the end of 2018; the gap is currently about one-half percentage point.

Eric Robertsen, global head of forex, rates and credit research at Standard Chartered, said the rising 10-year yield comes after “a very-aggressive move higher” in commodity prices this month. That has lifted inflation expectations.

But he sees inflation ultimately rising modestly, capping long-term yields while short-term ones continue to increase as the Federal Reserve keeps raising interest rates. At the same time, “the Fed is very paranoid about deliberately inverting the yield curve.”

Oil futures LCOM8, -0.05%   were down 0.3% in Asian trading.

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