GLOBAL MARKETS-Asian stocks set to rise as drug trials, data push Wall Street higher

* Equities rally as stimulus soothes second wave worries
* U.S. retail sales tally record rebound
* Bank of Japan increases support for cash-strapped firms

By Katanga Johnson
WASHINGTON, June 16 (Reuters) - Asian stocks were set to
climb on Wednesday after another late Wall Street surge in
response to upbeat trial results for a COVID-19 treatment and
data showing U.S. consumers spent big in May.
The prospects of fresh support from the Federal Reserve and
Bank of Japan also supported global equity markets. "It was a trifecta of positives today," said Jeffrey
Carbone, a partner at North Carolina-based Cornerstone Wealth,
referring to the U.S. data, drug trials and central bank
promises.
The upbeat sentiment weighed of U.S. Treasuries and
supported demand for lower-rated southern European debt. Not
everyone was in the mood for risk, however, with safe-have gold
pushed higher on news of a fresh coronavirus outbreak in
China. GOL/
"We got potentially more positive news in the fight against
COVID-19," said Ryan Detrick, senior market strategist at LPL
Financial in Charlotte, North Carolina. "But while COVID is in
most people's minds, in the stock market's view it is all about
reopening and the strong data suggest the recovery is happening
and faster than most expected."
At the beginning of his two-day testimony before Congress,
Fed Chairman Jerome Powell said a full recovery was unlikely
until the public is confident the disease had been contained.
In Asia, Australian S&P/ASX 200 futures YAPcm1 were up
0.5%, while Japan's Nikkei 225 futures NKc1 were up 0.2% but
down 0.6% from the underlying index's Tuesday close.
Hong Kong's Hang Seng index futures .HSI .HSIc1 were
down 0.3%.
U.S. retail sales jumped a record 17.7% in May, blowing past
the 8% increase analysts expected and supporting views the U.S.
recession might be drawing to an end. Also cheering investors were trial results showing
dexamethasone, a cheap and widely used steroid, reduced death
rates by about one-third among the most severely ill COVID-19
patients. On Wall Street, the Dow Jones Industrial Average .DJI rose
2.0%, the S&P 500 .SPX gained 1.9% and the Nasdaq Composite
.IXIC added 1.8%. That followed a broad 3% rally in major
European bourses. The MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 2.2%.
News elsewhere contributed to the bullish sentiment.
Germany's monthly ZEW investor sentiment survey showed
investors are confident that Europe's largest economy will be
over the worst of the coronavirus impact by the end of the
European summer. The dollar was mostly stronger, with the euro EUR= down
0.55% to $1.126 and the Japanese yen JPY= up 0.01% at 107.32.
The British pound rose on unemployment numbers that were not
as bad as feared and friendlier Brexit talks. GBP/
The BOJ increased its lending packages for cash-strapped
firms to $1 trillion from about $700 billion, while keeping
rates steady, sticking to its view that the Japanese economy
will gradually recover from the pandemic.
The yield on the benchmark U.S. 10-year Treasury notes
US10YT=RR rose 4.7 basis points to 0.7495%.
German, French, Dutch and other core yields also rose.
Riskier Italian yields fell to their lowest level since the end
of March, and the iTraxx European crossover index, which
reflects the cost of insuring against junk-rated corporate bond
defaults, fell to its lowest level in six days ITEX05Y=MG .
GVD/EUR

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