Asian Stocks, Bonds Decline as Dollar Extends Post-Yellen Gains

Asian stocks and bonds dropped, while the dollar strengthened versus most peers after Federal Reserve Chair Janet Yellen hinted that the U.S. economy may be allowed to run hot. Oil declined and corn advanced. 

The MSCI Asia Pacific Index fell to a one-month low and S&P 500 Index futures retreated. Benchmark bond yields in Australia, New Zealand and South Korea increased by at least four basis points and the Bloomberg Dollar Spot Index climbed to a seven-month high after Yellen's comments triggered a selloff in long-end U.S. Treasuries on Friday. Crude was set for its lowest close in a week after American producers increased drilling. 

Investors are focusing on U.S. economic data and Fed rhetoric to gauge the scale and timing of expected interest-rate increases in the world's biggest economy. Fed Vice Chair Stanley Fischer is due to speak Monday, when an update on American industrial output is also scheduled. Yellen said there are "plausible ways" that running the economy hot for a while could repair some damage caused to growth during the recession, indicating a willingness to slowly tighten policy even as inflation reaches or surpasses the central bank's target. 

"Several major global events could keep investors on the edge," said Vasu Menon, vice president for wealth management research at Oversea-Chinese Banking Corp. in Singapore. "U.S. economic data like inflation for September and home construction, home sales and industrial output figures will be eagerly anticipated for clues about the Fed's interest rate policy." 

The euro area is due to report last month's change in its consumer price index on Monday, while similar figures for the U.S. are scheduled for Tuesday. China may issue data on money supply and lending, ahead of Wednesday's release of gross domestic product figures for the third quarter. Bank of America Corp. has quarterly results coming, after Citigroup Inc. and JPMorgan Chase & Co. reported better-than-expected earnings on Friday. 

Stocks 

The MSCI Asia Pacific Index fell 0.4 percent as of 11:03 a.m. Tokyo time, after sliding 1.7 percent last week. Hong Kong's Hang Seng Index led losses in the region with a 1.1 percent drop, while Singapore's Straits Times Index retreated to its lowest since June. 

Crown Resorts Ltd. tumbled as much as 13 percent in Sydney after Chinese authorities detained 18 of its employees, including the head of its international high-roller operations. Sands China Ltd. sank more than 4 percent in Hong Kong. 

Futures on the S&P 500 Index fell 0.4 percent after the U.S. benchmark closed Friday little changed. Contracts on the U.K.'s FTSE 100 Index slipped 0.3 percent. 

Bonds 

The yield on Australia's 10-year sovereign bonds rose by five basis points to 2.32 percent, while the rate on similar-maturity New Zealand debt increased by four basis points to 2.55 percent. 

The yield on U.S. Treasuries due in a decade declined by one basis point to 1.79 percent, after climbing six basis points on Friday to the highest level in more than four months. 

Currencies 

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, added 0.1 percent following a 0.4 percent advance in the last session. The pound weakened 0.3 percent and Australia's dollar slipped 0.5 percent. The yen was little changed at 104.12 per dollar, following a 0.5 percent retreat on Friday. 

South Korea's won slumped as much as 0.9 percent to its weakest level since July and was leading losses among Asian currencies. 

Commodities 

Crude oil fell 0.5 percent to $50.11 a barrel in New York after a report showed the number of U.S. rigs increased to the highest level since February. Output from OPEC member Libya has expanded to 560,000 barrels a day, according to an official at National Oil Corp. This compares with a reported production rate of 540,000 a barrels a day last week. 

Corn futures in Chicago climbed as much as 1 percent to trade near the highest since July after the U.S. Department of Agriculture cut its grain crop forecast for the European Union. 

© 2016 Bloomberg L.P

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)