GLOBAL MARKETS-Asia shares, oil rally on vaccine hopes, euro at 2-week highs

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* MSCI ex-Japan jumps to highest since May 1
* Euro hovers since 2-week highs, yen weakens against dollar
* Coronavirus vaccine trial success sparks rally
* Oil jumps to highest in over 2 months

By Swati Pandey
SYDNEY, May 19 (Reuters) - Asian shares jumped on Tuesday
and oil extended gains on optimism the global economy would
recover quickly following a successful early-stage trial of a
coronavirus vaccine, while the euro hovered near a two-week top.
MSCI's broadest index of Asia Pacific shares outside of
Japan .MIAPJ0000PUS rose 1.5% to two-week highs.
Australia's benchmark index and Hong Kong's Hang Sang .HSI
were the lead gainers, up 2% each, South Korea .KS11 added
1.8% while China's blue-chip index .CSI300 climbed 0.8%.
Japan's Nikkei .N225 added 2% to the highest since early
March.
The gains followed a rally on Wall Street overnight after
data from Moderna Inc's MRNA.O COVID-19 vaccine, the first to
be tested in the United States, showed it produced protective
antibodies in a small group of healthy volunteers. The positive early test results boosted sentiment as
investors wagered on a faster-than-expected economic recovery.
Analysts, for now, expect a steep contraction in world
growth with the outlook for 2021 still uncertain with no
approved treatments or vaccines for COVID-19 currently.
Experts predict a safe and effective vaccine could take 12
to 18 months to develop.
On Wall Street overnight, the benchmark S&P 500 .SPX
posted its biggest one-day percentage gain in almost six weeks,
gaining 3.15%. The Dow Jones Industrial Average .DJI rose
3.85% and the Nasdaq Composite .IXIC added 2.44%.
"It may be the case that central bank liquidity is
chloroforming markets to overlook risks such as overleveraged
corporate and government balance sheets, growing COVID-19 case
numbers, growth holes and a slow recovery path," analysts at
Perpetual wrote in a note.
E-minis for the S&P 500 ESc1 were off 0.2% in Asian
trading.
The vaccine optimism sent treasury yields surging overnight
as investors dumped bonds, while gold XAU= came off its peak.
Spot prices were last up 0.4% $1,739.2 an ounce.
There was good news in Europe too, after France and Germany
called for the creation of a 500 billion euro ($543 billion)
Recovery Fund able to offer grants to the countries and regions
hardest hit by the coronavirus crisis.
The euro EUR=D3 hovered near a two-week top at $1.0907.
The British pound GBP=D3 was up 0.1% at $1.2201. The risk
sensitive Australian and New Zealand dollars were also up
slightly.
The safe haven yen JPY= eased on the greenback to be last
at 107.40 per dollar.
"Business survey data for the U.S. improved to merely
terrible in May, up from truly awful in April," JP Morgan Chase
economists said in a note on Tuesday.
"But collectively these data support our forecast that
monthly activity measures from May onward should, in general,
start to look better as restrictions are gradually eased."
Oil prices jumped to their highest in over two months, as
the easing of global lockdowns boosted hopes of economic
activity and as producers appeared to be following through with
planned production cuts. Brent crude LCOc1 was last up 1.24%, or 43 cents, at
$35.21. U.S. crude CLc1 jumped 2.7%, or 87 cents, to $32.69.

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