(Bloomberg) -- Australian bonds rallied strongly in early Asia trading Monday with investors focused firmly on yields after last week’s turmoil. Asian stocks looked set for a muted start.Ten-year Australian yields fell more than 20 basis points, paring some of last week’s 48-basis-point surge. Treasury futures pointed higher after Friday’s U.S. market rally, which drove the -10-year yield back to 1.40%. Equity futures were steady in Japan and Australian shares edged up. S&P 500 futures advanced after the gauge closed lower Friday, with U.S. tech stocks staging a modest rebound on the last day of a tumultuous week.The Australian dollar reversed some of the prior session’s losses along with its New Zealand counterpart, despite data showing China’s economic recovery slowed in February. Oil climbed.Last week’s selloff in global bonds stabilized after central banks from Asia to Europe moved to calm turmoil that sent Treasury yields to their highest level in a year and spurred a selloff in stocks. Investors are getting increasingly worried that accelerating inflation could trigger a pullback in monetary policy support, despite assurances from the Federal Reserve that higher yields reflect optimism about the outlook for growth.“The market is testing the Fed and global central banks as to how serious they are here,” Al Lord, Lexerd Capital Management chief executive officer, said on Bloomberg TV. “There are growth expectations and growing inflation concerns, and that’s playing out in the markets.”Over the weekend, the U.S. House of Representatives passed President Joe Biden’s $1.9 trillion Covid-19 aid package. The bill heads to the Senate, where Biden will need to woo Republican support or avoid losing a single Democratic vote.Read: Traders on Yield Watch in Bond Markets ‘Not for Faint-Hearted’Meanwhile, China’s economic recovery slowed in February as factories shut during the Lunar New Year holidays and virus restrictions dampened what’s usually a busy travel season.There are some key events to watch this week:Caixin China manufacturing PMI is due Monday.Reserve Bank of Australia sets monetary policy Tuesday.U.S. Federal Reserve Beige Book is due Wednesday.OPEC+ meeting on output Thursday.Fed Chair Jerome Powell to discuss the economy at a Wall Street Journal event on Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.Beijing is set to unveil its major economic goals on March 5, when the National People’s Congress convenes for its yearly meeting.These are some of the main moves in markets:StocksS&P 500 futures rose 0.3% as of 8:04 a.m. in Tokyo. The S&P 500 Index fell 0.5%.Nikkei 225 futures were little changed.Australia’s S&P/ASX 200 Index rose 0.3%.Hong Kong’s Hang Seng Index was little changed earlier.CurrenciesThe yen traded at 106.54 per dollar.The offshore yuan was at 6.4785 per dollar.The Bloomberg Dollar Spot Index rose 0.7% Friday.The euro was at $1.2078.The Aussie dollar rose 0.3% to 77.28 U.S. cents.BondsAustralia’s 10-year yield fell 23 basis points to 1.68%.The yield on 10-year Treasuries tumbled 12 basis points to 1.40% Friday.CommoditiesWest Texas Intermediate crude rose 1.3% to $62.26 a barrel.Gold rose 0.3% to $1,738.84 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.