* MSCI AxJ index rises 0.4% for two-week peak
* US dollar index remains close to two-week low
* Asian stock markets: tmsnrt.rs/2zpUAr4
SINGAPORE / NEW YORK, April 6 (Reuters) – Asian stock markets rose on Tuesday with another batch of strong US economic data reinforcing the global outlook, while the foreign exchange and bond markets stopped to breathe after a month. of rapid gains in the dollar and in the US Treasury yields.
The broader MSCI index for Asia Pacific stocks outside Japan advanced 0.4% to a two-week high, while the Tokyo Nikkei was close to a two-week peak. The Dow and S&P 500 closed at record highs on Monday.
Overnight, following an abundant employment report on Good Friday, March data showed a gauge of US service activity hit a record high, while at the same time markets are celebrating a huge spending program in the United States. $ 2 trillion government.
“On the aggregate, it is good for the global economy and is therefore a justification for entering more cyclical sensitive currency pairs and buying stocks in general,” said Kyle Rodda, market analyst at IG brokerage in Melbourne.
“Yields have not changed much, so technology stocks have outperformed,” he said. In Asia, chipmakers raised Taiwan’s benchmark index by 1% to a record high, and broad gains lifted Australia’s ASX 200 to a seven-week high.
The Shanghai Composite has remained stable, while the Hong Kong stock market remains closed for public holidays.
European markets, which have been closed since Thursday’s close, were also ready for gains with DAX futures rising 1.2%, EuroSTOXX 50 futures 1% higher and FTSE futures rising 0.8%. The S&P 500 futures remained stable.
Yield on 10-year US Treasury bonds was flat in New York, and in Asia it fell two basis points to 1.6860% on Tuesday. The US dollar remained at $ 1.1810 per euro, after registering its sharpest decline in several weeks overnight.
“Considering the strength of the US economic news flow since we stopped Thursday for the Easter holiday, the surprise … is that US bond yields are lower than in the middle of last week and the dollar it’s weaker, ”said Ray Attrill, head of foreign exchange strategy at the National Australia Bank.
The dollar fell a fraction higher against the yen on Tuesday to 110.25 and remained stable elsewhere. The Australian dollar remained at $ 0.7647 before a policy decision by the Reserve Bank of Australia, scheduled for 0430 GMT.
The retraction in yields and the dollar follows strong upward movements during the first quarter, with an increase of 83 basis points in 10-year earnings, the biggest quarterly gain in a dozen years, and a 3.6% increase in dollar index, the sharpest since 2018.
This has been driven mainly by investors betting on the United States leading the global recovery and forcing the US Federal Reserve to raise rates earlier than expected.
The Fed’s minutes of its March meeting are due on Wednesday, although it does not address the latest data surprises.
The Fed Funds markets priced at a total rate hike in late 2022, while the Eurodollar markets priced them in December.
“What needs to be tested is how the Fed enforces and eases its policy of flexible average inflation targets,” said Vishnu Varathan, chief economist at Mizuho Bank in Singapore.
“The movement of the dollar in recent weeks reflects the advance of the markets, despite what the Fed said,” he added.
The dollar’s fluctuation overnight helped oil prices to rise and Brent oil futures rose 1.2% to $ 62.91 a barrel, while US oil rose by the same margin to $ 59.35 a barrel . Gold fell 0.3% to $ 1,733 an ounce.
Reporting by Tom Westbrook in Singapore and Chibuike Oguh in New York; Editing by Christopher Cushing and Shri Navaratnam