Asian Stock Market: Rebounds in sync with Treasury yields, Russia-Ukraine peace talks eyed

• Asian markets drift higher on significant improvement in the US bond yields.  
• Powell’s testimony underpinned a quarter bps interest rate hike against a 50 bps one.
• China is underperforming to its neighbors despite remaining in the subtext of Biden’s SOTU speech.

Markets in the Asian domain part ways with the Chinese indices as the former are underpinned by Fed Chair Jerome Powell's signal to a 25 basis points (bps) interest rate hike in the March monetary policy meeting.

While the latter has sensed pressure after US President Joe Biden pinned China in his first State of the Union (SOTU) speech stating that “it is never a good bet to bet against the American people. It is worth noting that the Russian invasion of Ukraine remained the dominant part of Biden’s SOTU speech.

Biden said the US and China were engaged in a race to "win the economic competition of the 21st century", and vowed that the US was embarking on an "infrastructure decade", announcing plans this year to fix more than 65,000 miles of highway and 1,500 bridges in disrepair, as per South China Morning Post.

The Asian markets have witnessed a repulsive buying on Thursday, as investors found it a value bet after nosediving in the last few trading sessions. However, the broader risk-on impulse is still active and equities could face the heat on any negative outcome post the Russia-Ukraine peace talks.

Meanwhile, the US dollar index (DXY) seems to pare its bullish opening gap gains, which is also supporting Thursday’s rally in the Asian markets.

The 10-year US Treasury yields are trading a tad lower around 0.5% on Thursday, which seems a corrective pullback after surging by around 9.5% on Wednesday.

Going forward, the outcome of the Russia-Ukraine peace talks will remain the major driver for markets. Any negative outcome is bound to hammer the Asian equities while a ceasefire headline will likely spur a firmer rally.