* The MSCI AxJ index increases by 0.4% to a maximum of two weeks
* The US dollar index remains almost low for two weeks
* Asian stock markets: tmsnrt.rs/2zpUAr4
SINGAPORE / NEW YORK, April 6 (Reuters) – Asian stock markets rose on Tuesday, while another batch of strong U.S. economic data bolstered global outlook as foreign exchange and bond markets stalled later of a month of rapid gains in the dollar and U.S. Treasury yields.
MSCI’s broader Asia-Pacific stock index outside Japan advanced 0.4% to a two-week high, while Tokyo’s Nikkei fell shortly after a two-week high. . The Dow and S&P 500 had closed at record highs on Monday.
Overnight, according to a strong employment report on Good Friday, March data showed that an indicator of service activity in the United States hit a record, while at the same time markets applauded a huge $ 2 trillion government spending program.
“Overall, it’s good for the global economy and therefore a justification for switching to more currency-sensitive currency pairs and buying stocks in general,” said Kyle Rodda, brokerage market analyst IG in Melbourne.
“Yields haven’t changed much and so technology stocks have outperformed,” he said. In Asia, chip makers raised Taiwan’s benchmark by 1% to a record high and big gains lifted Australia’s ASX 200 to a seven-week high.
The Shanghai Composite was stable, while the Hong Kong Stock Exchange remains closed for holidays.
European markets, closed since Thursday’s close, were also on the verge of making gains with DAX futures up 1.2%, EuroSTOXX 50 futures up 1% and FTSE futures up 0.8%. The future S&P 500 was stable.
U.S. Treasury yields at ten-year benchmarks were stable in New York and Asia on Tuesday fell two basis points to 1.6860%. The US dollar remained at $ 1.1810 per euro after recording the sharpest fall in several weeks overnight.
“Given the strength of the U.S. economic news flow since we left the Easter break on Thursday, the surprise … is that US bond yields are lower than in the middle of last week and the dollar is softer, ”said Ray Attrill, head of cash strategy at National Australia Bank.
The dollar shifted a fraction higher in the yen on Tuesday to 110.25 and was generally stable elsewhere. The Australian dollar remained at $ 0.7647 before a political decision was made by the Reserve Bank of Australia at 04:30 GMT.
The decline in yields and the greenback continued significant upward movements during the first quarter, with a rise of 83 basis points in yields to ten years, the largest quarterly increase in a dozen years and an increase of 3, 6% of the dollar index, the strongest since 2018.
This has been mainly driven by investors who have opted for the United States to lead the global recovery and force the U.S. Federal Reserve to raise rates earlier than expected.
The Fed minutes of the March meeting are due Wednesday, though they won’t address the latest data surprises.
The Fed’s underlying markets have had a price on a full rate hike until the end of 2022, while Eurodollar markets have it up until December.
“What needs to be proven is how the Fed strengthens and reassures its flexible average inflation targeting policy,” said Vishnu Varathan, chief economist at Singapore’s Mizuho Bank.
“The last few weeks of dollar movement reflect that markets are moving forward despite what the Fed has said,” he added.
The dollar’s hesitation overnight helped boost oil prices and futures on Brent crude rose 1.2% to $ 62.91 a barrel, while U.S. crude rose by same margin to $ 59.35 a barrel. Gold touched 0.3%, to $ 1,733 an ounce.
Report by Tom Westbrook in Singapore and Chibuike Oguh in New York; Edited by Christopher Cushing and Shri Navaratnam