* The MSCI AxJ index increases by 0.4% to the two-week high
* The US dollar index persists for almost two weeks
* Asian stock markets: tmsnrt.rs/2zpUAr4
SINGAPORE / NEW YORK, April 6 (Reuters) – Asian stock markets rose on Tuesday as another strong US economic data boosted the global outlook, while foreign exchange and bond markets took a breather after a month of rapid gains in the dollar and in the US Treasury yields.
The largest MSCI index of Asia-Pacific equities outside Japan rose 0.4% to a two-week high, while the Tokyo Nikkei failed to reach a two-week high. The Dow and S&P 500 closed at record highs on Monday.
Overnight, following a job report with the bumper on Good Friday, March data showed that an indicator of US service activity reached a record high, while markets cheered a huge government spending program. 2 trillion dollars.
“Overall, it’s good for the global economy, so it’s a justification for switching to more cyclically sensitive currency pairs and buying stocks in general,” said Kyle Rodda, market analyst at IG Brokerage. from Melbourne.
“Yields have not given up too much, and so technology stocks have outperformed,” he said. In Asia, chip makers raised Taiwan’s benchmark by 1% to a record high, and high gains raised Australia’s ASX 200 to a seven-week high.
Shanghai Composite has been steady, while the Hong Kong Stock Exchange remains closed for the holidays.
European markets, which have been closed since Thursday’s close, were also prepared for gains, with DAX futures up 1.2%, EuroSTOXX 50 futures up 1% higher and FTSE futures up 0% , 8%. The S&P 500 futures were steady.
The yield on the US Treasury at 10 years of reference was constant in New York, and in Asia, on Tuesday, it decreased by two basis points, to 1.6860%. The US dollar remained at $ 1.1810 per euro after falling sharply in a few weeks overnight.
“Given the strength of the US economic news flow since we left for the Easter break on Thursday, the surprise … is that US bond yields are lower than they were in the middle of last week and the dollar is lower,” Ray said. Attrill, head of FX strategy at National Australia Bank.
The dollar rose a fraction higher on the yen on Tuesday to 110.25 and was generally stable elsewhere. The Australian dollar remained at $ 0.7647 ahead of a Reserve Bank of Australia policy decision, which is expected to expire at 0430 GMT.
Withdrawals of yields and the greenback followed major upward movements in the first quarter, with an 83-point increase in 10-year yields, the largest quarterly increase in ten years and a 3.6% increase in the dollar index, the strongest of 2018.
This was mainly driven by investors who bet on the United States to lead the global recovery and force the US Federal Reserve to raise rates sooner than expected.
The Fed minutes from its March meeting are set to come on Wednesday, although they will not address the latest data surprises.
Fed Fund markets have been priced in a full rate hike by the end of 2022, while Eurodollar markets are priced through December.
“What needs to be tested is how the Fed strengthens and ensures its flexible policy of the average inflation target,” said Vishnu Varathan, chief economist at Singapore’s Mizuho Bank.
“The last few weeks of the dollar move reflect the markets that are moving forward, despite what the Fed has said,” he added.
The dollar’s overnight fluctuation helped boost oil prices, and Brent crude futures rose 1.2% to $ 62.91 a barrel, while US crude rose the same margin to $ 59.35 a barrel. barrel. Gold reached 0.3% at $ 1,733 an ounce.
Reporting by Tom Westbrook in Singapore and Chibuike Oguh in New York; Edited by Christopher Cushing and Shri Navaratnam