(Updates prices, adds Chinese shares)
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Asia shares inch higher as U.S. markets holiday
* Oil prices climb on Libyan supply concerns
* Dollar firm as U.S. economy outperforms
* Eyes on U.S. earnings, Netflix to report on Tuesday
By Wayne Cole
SYDNEY, Jan 20 (Reuters) - Asian shares neared a 20-month
top on Monday as Wall Street extended its run of record peaks on
solid U.S. economic data and lashes of liquidity from the
Federal Reserve.
Oil prices jumped as oilfields in southwest Libya began
shutting down after forces loyal to Khalifa Haftar closed a
pipeline, potentially reducing national output to a fraction of
its normal level. Early turnover in Asian shares was light with U.S. stock and
bond markets closed for the Martin Luther King Jr. holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS firmed 0.1%, after notching its highest close
since June 2018. Japan's Nikkei .N225 added 0.2% to be near
its highest in 15 months.
Chinese shares opened firm with the blue-chip CSI300 index
.CSI300 up 0.2%.
Australia's main index .AXJO scored another all-time peak
and South Korea .KS11 was near its best level since October
2018. E-Mini futures for the S&P 500 ESc1 edged up 0.1%.
Eyes will be on U.S. corporate earnings with Netflix Inc
NFLX.O , Intel Corp INTC.O and Texas Instruments Inc TXN.O
set to report this week, while central banks in the European
Union, Canada and Japan hold policy meetings.
Sentiment was supported by the relentless run of record
highs on Wall Street. Only three weeks into the new year, the
S&P 500 .SPX has gained just over 3% and the NASDAQ .IXIC
almost 5%.
Ray Attrill, head of foreign exchange strategy at National
Australia Bank, suspects the strength on Wall Street owes much
to the Federal Reserve's decision in September to rein in rising
repo rates by flooding markets with cash.
"The relationship between the size of the Fed's balance
sheet, now some 11% bigger than where it was in late September,
and the performance of U.S. risk assets is uncanny," he said,
noting the balance sheet had just hit a three-month top of
$4.18 trillion.
Analysts at BofA Global Research noted global stock market
capitalisation had ballooned by $13 trillion since its September
lows and the S&P was only 5% away from marking the biggest bull
run in history.
"We stay irrationally bullish until peak positioning and
peak liquidity incite a spike in bond yields and a 4-8% equity
correction," they said in a note.
The Fed's buying binge on Treasury bills has kept bonds bid
even as stocks surged and economic data stayed healthy. Yields
on two-year notes US2YT=RR are dead in line with the overnight
cash rate at 1.56%, compared to 2.62% this time last year.
The string of mostly solid U.S. data has underpinned the
dollar, particularly against the safe-harbour yen. The dollar
stood at 110.19 yen JPY= on Monday, having hit an eight-month
peak of 110.28 last week.
The euro was stuck at $1.1095 EUR= , while sterling idled
at $1.3000 GBP= after poor British economic news fanned
speculation about a cut in interest rates. Against a basket of currencies, the dollar was flat at
97.616 .DXY , moving away from the recent trough of 96.355.
Spot gold stood at $1,557.75 per ounce XAU= , having hit a
seven-year top earlier this month of $1,610.90 at the height of
Iran-U.S. tensions.
Concerns about a cut in supply from Libya sent oil prices
higher. O/R Brent crude LCOc1 futures rose 76 cents to $65.61 a
barrel, while U.S. crude CLc1 jumped 61 cents to $59.15.
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Pipeline closure risks taking nearly all Libya's oil offline
reverses gains after bleak British retail sales
powers back Libya ceasefire as commander's forces choke
oil flows ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>