GLOBAL MARKETS-Asian shares come off one-month lows; eyes on U.S. payrolls

(Recasts, updates levels throughout)
By Swati Pandey
SYDNEY, March 5 (Reuters) - A late rally in Chinese shares
on Friday helped pull Asian stocks off one-month lows as
investors picked bargains while attention shifted to U.S.
non-farm payrolls due later in the day.
E-Mini futures for S&P 500 ESc1 , which were down 0.5%
during early Asian trading, gave up all losses by afternoon to
be a shade higher.
Futures for Europe were pointing to a weaker start though,
with those for Eurostoxx 50 STXEc1 , Germany's Dax FDXc1 and
London's FTSE FFIc1 down 0.3% to 0.6%.
In Asia, Australian stocks .AXJO dropped more than 0.7%,
Japan's Nikkei share average .N225 shed 0.2%, after earlier
being down more than 1%, and shares in Seoul .KS11 fell 0.4%.
Chinese shares, which had opened in the red, reversed losses
with the bluechip CSI300 index .CSI300 up 0.3%.
That left MSCI's broadest index of Asia-Pacific shares
outside of Japan .MIAPJ0000PUS down 0.4% at 694.87 but still
above the day's low of 684.52, a level not seen since Feb. 1.
"China had a decent rally at the lows so that pulled markets
higher. We saw a nice turnaround coming through," said Chris
Weston, Melbourne-based strategist for Pepperstone.
"We are seeing some strength come back. Energy, staples,
utilities have done well and financials too as a hedge against
rising rates."
Earlier, equity investors were rattled by a sell-off in U.S.
Treasuries which sent yields rising and hoisted the dollar to a
three-month high, dragging the Japanese yen lower.
Energy markets were not spared the volatility either, with
oil prices adding to big gains overnight after the Organization
of Petroleum Exporting Countries (OPEC) and its allies agreed to
mostly maintain their supply cuts in April as they await a more
solid recovery in demand from the COVID-19 pandemic. O/R
Investor focus turned to the release of the U.S. non-farm
payrolls for February, with the market eyeing a bounce back in
employment growth and a steady unemployment rate at 6.3%.
"We suspect the market will be inclined to look through a
weaker number, with investors looking ahead to the big fiscal
stimulus planned in the U.S. and the eventual removal of
Covid-related restrictions later this year," said Ray Attrill,
head of forex strategy at National Australia Bank.
On Thursday, U.S. stocks slumped after Federal Reserve Chair
Jerome Powell disappointed some investors by not indicating that
the Fed might step up purchases of long-term bonds to hold down
longer-term interest rates. The tech-heavy Nasdaq Composite .IXIC tumbled 2.1%, taking
it down about 10% from its record close on Feb. 12 and putting
it in correction territory. .N
Even though Powell made it clear that the Fed was not close
to changing its ultra-loose monetary policy stance anytime soon,
some analysts still worried rising Treasury yields could herald
higher borrowing costs, thereby limiting the fragile U.S.
economic recovery.
Bond investors sold U.S. debt. The yield on 10-year
Treasuries US10YT=RR climbed above 1.5% though it was still
below a one-year high of 1.614% struck last week. US/
The yield curve, a measure of economic expectations,
steepened on rising yields, with the gap between two- and
10-year yields widening by another 6.3 basis points overnight.
Rising Treasury yields bolstered demand for the dollar. The
dollar index =USD jumped to a three-month high of 91.734.
USD/
A stronger dollar hobbled the yen. By early Friday, the yen
JPY= fell to as low as 108.11, the lowest since June 9.
The euro EUR=EBS was also tripped by a firmer dollar, with
the common currency sluggish at $1.1955.
Climbing yields and dollar strength pummeled gold prices,
which sank to a nine-month low as investors sold the precious
metal to reduce the opportunity cost of holding the non-yielding
asset. GOL/
Spot gold XAU= was last at $1,697 per ounce, trading below
$1,700 for the first time since June 2020.
Oil prices extended gains on Friday after zooming higher
overnight.
U.S. crude futures CLc1 climbed 82 cents to $64.65,
holding just below a 13-month high hit on Thursday. Brent crude
LCOc1 rose 88 cents to $67.62 a barrel.

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