* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia markets swing higher, Nikkei at 3-mth peak
* China surveys show growth at home, subdued exports
* S&P 500 futures bounce, though riots add to economic woe
* Busy week sees ECB meet, U.S. payrolls report
By Wayne Cole
SYDNEY, June 1 (Reuters) - Asian shares pushed to
three-month highs on Monday as progress on opening up economies
helped offset jitters over riots in U.S. cities and unease over
Washington's power struggle with Beijing.
There was also relief that while President Donald Trump
began the process of ending special U.S. treatment for Hong Kong
to punish China, he left their trade deal intact. "With specific and verifiable measures against China
appearing to be weak, markets may draw hollow consolation that
the U.S. is treading carefully," said analysts at Mizuho in a
note.
After a cautious start Asian markets were led higher by
China on signs parts of the domestic economy were picking up.
Hong Kong .HSI managed to rally 3.6%, while Chinese blue chips
.CSI300 put on 2.4%.
An official business survey from China showed its factory
activity grew at a slower pace in May but momentum in the
services and construction sectors quickened.
A private survey showed a return to growth in May, though
exports remained depressed. That helped lift MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS 2.1% to its highest since
early March. Japan's Nikkei .N225 added 0.7% to also reach a
three-month peak.
E-Mini futures for the S&P 500 ESc1 recovered to be flat,
having been down 1% in early trade. EUROSTOXX 50 futures
STXEc1 firmed 1.4% and FTSE futures FFIc1 1.1%.
The resilience was notable given major U.S. cities were
cleaning up streets strewn with broken glass and burned out cars
as curfews failed to stop confrontations between activists and
law enforcement. The turmoil was a fresh setback for the economy which was
only just emerging from a downturn akin to the Great Depression.
Following poor data on spending and trade out on Friday, the
Atlanta Federal Reserve estimated economic output could drop a
staggering 51% annualised in the second quarter.
The May jobs report due out on Friday is forecast to show
the unemployment rate surged to 19.8%, smashing April's record
14.7%. Payrolls are expected to drop by 7.4 million, on top of
the 20.5 million jobs lost the previous month.
YEARS, NOT MONTHS
"Current unemployment numbers go far beyond what has been
experienced in any post-war recession," wrote Barclays economist
Christian Keller in a note.
"To the extent that some sectors may never return to
pre-pandemic business-as-usual, labour faces a substantial
challenge to reallocate workers," he added. "Such a process
could be a matter of years rather than months or quarters and in
the meantime it would weigh on consumer demand."
Bond investors suspect economies will need massive amounts
of central bank support long after they reopen and that is
keeping yields super low even as governments borrow much more.
Yields on U.S. 10-year notes US10YT=RR were trading steady
at 0.66% having recovered from a blip up to 0.74% last month
when the market absorbed a tidal wave of new issuance.
The decline in U.S. yields has been a burden for the dollar,
but the world's reserve currency also tends to benefit from
safe-haven status to limit the losses.
Early Monday, the dollar was 0.2% softer on a basket of
peers at 98.018 =USD having touched an 11-week low of 97.944
on Friday. It was also down on the yen at 107.52 JPY= .
Much of the dollar's recent decline has come against the
euro which has been broadly boosted by plans for an EU stimulus
package. The single currency was last up at $1.1131 EUR= ,
after climbing 1.8% last week.
Markets are awaiting a meeting of the European Central Bank
on Thursday where it is widely expected to raise its asset
buying by around 500 billion euros to 1.25 trillion.
In commodity markets, gold added 0.9% to $1,1742 an ounce
XAU= . GOL/
Oil prices initially eased on worries about U.S. demand, but
found support from reports Russia had no objection to the next
meeting of OPEC and its allies being brought forward to June 4
from the following week. Brent crude LCOc1 futures were off 22 cents at $37.62 a
barrel, while U.S. crude CLc1 fell 19 cents to $35.30. O/R
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(Editing by Stephen Coates & Simon Cameron-Moore)