SYDNEY (Reuters) - Asian stocks dipped on Monday as investors braced for a bevy of earnings from the world’s largest corporations, while keeping a wary eye on US bond yields as they approach peaks that have triggered market spasms in the past.
Traders were also anxiously awaiting surveys on global manufacturing for April to see if economic softness in the first quarter was just a passing phase linked to poor weather and the Lunar New Year holidays.
The first reading from Japan was tentatively upbeat with its PMI firming to 53.3 in April as output and domestic demand picked up.
On the geopolitical front, US President Donald Trump said on Sunday the North Korean nuclear crisis was a long way from being resolved, striking a cautious note a day after the North pledged to end its nuclear tests.
Oil prices edged down in early trade but were not far from their highest since late 2014. The market had wobbled on Friday when Trump tweeted criticism of OPEC’s role in pushing up global prices, but quickly steadied.
Brent crude oil futures LCOc1 were off 9 cents at $73.97 per barrel, while US crude CLc1 eased 19 cents to $68.21.
In stock markets, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.4 percent, with South Korea off 0.3 percent.
Japan's Nikkei also eased 0.3 percent as tech stocks continued to struggle with a warning on waning demand for mobile phones.
E-Mini futures for the S&P 500 ESc1 went the other way, edging up 0.1 percent.
Rising bond yields had pressured Wall Street on Friday, though the S&P 500 still managed to end the week with a slight gain.
More than 180 companies in the S&P 500 are due to report results this week including Amazon, Alphabet, Facebook, Microsoft, Boeing and Chevron.
THE 3 PCT BARRIER
The spike in oil has driven up both market expectations of future inflation USIL5YF5Y=R and long-term bond yields.
Yields on 10-year Treasuries US10YT=RR finished last week at the highest since early 2014 and at 2.966 percent were again challenging the hugely important 3 percent barrier.
The last time yields neared this number in 2013 it rocked risk appetite and sent stocks sliding.
“Another $5/barrel increase in oil will be enough for US 10-year yields to threaten 3 percent. Oil is now at the cusp of levels where higher prices will spark greater FX and broader asset market volatility,” said Deutsche Bank’s macro strategist, Alan Ruskin.