GLOBAL MARKETS-Stocks gain on U.S. recovery prospects but dollar pauses for breath

* MSCI AxJ index rises 0.4% to two-week peak
* U.S. dollar index lingers near two-week low
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook and Chibuike Oguh
SINGAPORE/NEW YORK, April 6 (Reuters) - Asia's stock markets
rose on Tuesday as another batch of strong U.S. economic data
bolstered the global outlook, while currency and bond markets
paused for breath after a month of rapid gains in the dollar and
in U.S. Treasury yields.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS advanced 0.4% to a two-week high, while Tokyo's
Nikkei .N225 loitered just short of a two-week peak. The Dow
.DJI and S&P 500 .SPX had closed at record peaks on Monday.
Overnight, on the heels of a bumper jobs report on Good
Friday, March data showed a gauge of U.S. services activity hit
a record high while at the same time markets are cheering a huge
$2 trillion government spending program.
"On aggregate, it's good for the global economy and
therefore that's a justification to move into more
cyclical-sensitive FX pairs and to buy stocks in general," said
Kyle Rodda, market analyst at brokerage IG in Melbourne.
"Yields haven't budged much and so tech stocks have
outperformed," he said. In Asia, chipmakers pushed Taiwan's
benchmark index up .TWII 1% to a record peak and broad gains
lifted Australia's ASX 200 .AXJO to a seven-week high. .AX
The Shanghai Composite .SSEC was steady, while Hong Kong's
stock market remains closed for holidays.
European markets, which have been shut since Thursday's
close, were also poised for gains with DAX futures FDXc1 up
1.2%, EuroSTOXX 50 futures STXEc1 1% higher and FTSE futures
FFIc1 up 0.8%. S&P 500 futures ESc1 were steady.
The yield on benchmark 10-year U.S. Treasuries US10YT=RR
was steady in New York, and in Asia on Tuesday it fell two basis
points to 1.6860%. The U.S. dollar held at $1.1810 per euro
after posting its steepest drop in several weeks overnight.
"Considering the strength of the U.S. economic news flow
since we left off on Thursday for the Easter break, the surprise
... is that U.S. bond yields are lower than they were in the
middle of last week and the dollar is softer," said Ray Attrill,
head of FX strategy at National Australia Bank.
The dollar crept a fraction higher on the yen on Tuesday to
110.25 JPY= and was broadly steady elsewhere. The Australian
dollar AUD=D3 held at $0.7647 ahead of a Reserve Bank of
Australia policy decision due at 0430 GMT.
The pullback in yields and the greenback follows major moves
upward over the first quarter, with an 83 basis point rise in
10-year yields the biggest quarterly gain in a dozen years and a
3.6% rise in the dollar index the sharpest since 2018.
That has been mostly driven by investors betting on the
United States leading the global recovery and forcing the U.S.
Federal Reserve to hike rates sooner than expected.
Fed minutes from its March meeting are due on Wednesday,
although they will not address the most recent data surprises.
Fed Funds 0#FF: markets have priced in a full rate hike by
the end of 2022 while eurodollar markets have it priced by
December 0#ED: .
"What needs to be tested is how the Fed reinforces and
reassures on its flexible average inflation target policy," said
Vishnu Varathan, head economist at Mizuho Bank in Singapore.
"The dollar's past few weeks of movement reflects markets
moving ahead despite what the Fed has said," he added.
The dollar's overnight wobble helped oil prices higher and
Brent crude futures LCOc1 rose 1.2% to $62.91 a barrel while
U.S. crude CLc1 climbed by the same margin to $59.35 a barrel.
Gold XAU= tacked on 0.3% to $1,733 an ounce. O/R GOL/

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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