* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Markets on edge before ECB meeting
* German bund sell-off hits bonds in Asia
* Investors await more stimulus for global economy
By Stanley White
TOKYO, Sept 10 (Reuters) - Bond prices edged lower on
Tuesday after German bund yields hit a one-month high following
a report by Reuters that Germany is considering a "shadow
budget" to allow the government to circumvent its strict
national debt rules.
Asian stocks were little moved ahead of the European Central
Bank's upcoming meeting, with MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS unchanged.
Japan's Nikkei stock index .N225 was up 0.36%, while
Australian shares .AXJO fell 0.24%.
The ECB is all but certain to introduce a package of
monetary easing and stimulus measures on Thursday due to the
ongoing U.S.-Sino trade war and signs of a global economic
slowdown, but markets doubt it will opt for a massive extension
of bond purchases known as quantitative easing. The U.S. Federal Reserve is also widely expected to cut
interest rates next week as policymakers race to shield the
global economy from risks, which also include Britain's planned
exit from the European Union.
"Bond yields had fallen so far so fast that they were due
for a pullback, and you have some nerves setting in before the
ECB," said Shane Oliver, head of investment strategy and chief
economist at AMP Capital Investors in Sydney.
"The move in bond yields will affect share prices, but its
still uncertain how stocks will react. Over the next six months
sentiment around global growth will improve, but some of the
risks remain to be resolved."
Oil futures hit their highest level in six weeks in Asia
after Saudi Arabia's new energy minister confirmed he would
stick with his country's policy of limiting crude output to
support prices. O/R
U.S. stock futures ESc1 were up 0.18% in Asia after the
S&P 500 .SPX ended flat in New York on Monday. .N
Germany's 10-year Bund yield rose to a one-month high at
minus 0.565% DE10YT=RR , while longer-dated 30-year bond yields
DE30YT=RR closed at minus 0.036% on Monday.
Germany is considering setting up independent public
agencies that could take on new debt and invest in the economy,
three people familiar with talks about the plan told Reuters.
Europe's largest economy is teetering on the brink of
recession, but strict national spending rules have tied
policymakers hands on fiscal policy.
The sell-off in German debt pushed 10-year Treasury yields
US10YT=RR to a four-week high of 1.6472% in Asia on Tuesday.
Yields on 10-year Japanese government bonds JP10YTN=JBTC also
rose to a three-week high of minus 0.230%.
U.S. crude CLc1 rose 0.73% to $58.34 a barrel, the highest
since July 31.
Prince Abdulaziz bin Salman, who became Saudi Arabia's new
energy minister on Sunday, told reporters there would be "no
radical" change in Saudi's oil policy. Saudi Arabia is OPEC's de
facto leader. (Editing by Lincoln Feast.)