China's four major state banks outperformed intraday in the A-share market: Bank of China rose over 3%, while China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China each gained more than 1.5%.

The 30-year U.S. Treasury yield moved back above 5% intraday without a corresponding jump at the short end that would signal stronger Fed rate-hike bets. Earlier the 2-year traded around 4.11%-4.13% and the 10-year around 4.46%-4.47%, leaving the short end relatively unchanged. The move resembles a re-test of long-end resistance — the 30-year hit 5.006% in early May and briefly touched 5% on July 1 — and points to persistent market concerns about long-term inflation, fiscal supply and term premium. Market impact is concentrated on long-term discount rates, mortgage rates and equity valuation anchors, not on the policy-sensitive short end.

Capital Economics’ Gareth Leather says rising El Nifio-driven food price risks make Asian central banks unlikely to quickly reverse recent rate hikes. Many central banks responded aggressively to the earlier energy shock, with most hiking at least once; while lower energy prices have eased the urgency for further tightening, food carries a higher weight than energy in Asian consumer baskets, so El Nifio could keep policymakers cautious. Capital Economics continues to expect further tightening in India, Pakistan and South Korea over the coming months.