* MSCI AxJ index hovers by all-time high
* Fed confirms backstop, Congress mulls stimulus
* Oil up, bonds down, bitcoin soaring and dollar squeezed
* Asia stock markets this year: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and David Henry
SINGAPORE/NEW YORK, Dec 17 (Reuters) - Asian stocks perched
near record heights, the dollar languished at two-year lows and
oil prices stood at their strongest since March on Thursday, as
monetary support and the hope of fiscal stimulus in the United
States put traders in a festive mood.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.3% to touch an all-time high. Japan's
Nikkei .N225 rose 0.2%, though both fell back to flat while
investors waited for U.S. lawmakers to agree on stimulus.
The risk-sensitive Australian and New Zealand dollars
climbed to multi-year tops with the euro not far behind, and
U.S. stock futures extended gains from Wednesday. FRX/
Brent crude oil futures LCOc1 , a proxy for global energy
consumption and growth, rose 0.7% to $51.45 a barrel, the
highest level since early March - before over-production fears
and virus worries pushed oil prices off a cliff. O/R
"My suspicion is markets are inclined to extend this rally
for two reasons," said Vishnu Varathan, head economist at Mizuho
in Singapore, citing U.S. monetary policy support and the good
news on the horizon as vaccines roll out globally.
"If new infection numbers don't go crazy...I think there is
some scope for a so-called Santa rally into the end of the
year," he said. "That's what markets appear to be poised for."
U.S. Federal Reserve Chairman Jerome Powell vowed on
Wednesday to keep pouring cash in to markets until the U.S.
economic recovery is secure.
Bond traders were disappointed he didn't extend the Fed's
purchase program deeper down the yield curve, and U.S.
Treasuries sold off at longer tenors, but everybody else took it
as a signal that the bank will have their back. US/
"The message was clear – the Fed is willing and capable of
doing more if needed," said Kerry Craig, global market
strategist at J.P. Morgan Asset Management in Melbourne.
"The meeting also made clear that rates are highly unlikely
to move until bond purchases come to an end. This means the
market focus turns to the prospect of a pre-Christmas fiscal
package from Congress."
CHRISTMAS PACKAGE
U.S. lawmakers edged closer to agreement on a $900 billion
virus-relief spending package on Wednesday with top Democrats
and Republicans sounding more positive than they have in months
about getting something done. The proposal is expected to include $600-$700 stimulus
checks and extended unemployment benefits and cannot come soon
enough as U.S. COVID-19 infections soar to record levels.
"The market is buying it and the mood music from (Republican
Senate leader Mitch) McConnell and others is good," said Gavin
Friend, senior market strategist at National Australia Bank,
while adding the package likely to wind up relatively modest.
Elsewhere better-than-expected labour data in Australia
pushed the Aussie AUD= as high as $0.7591, its strongest since
mid 2018, though it eased back to flat by midsession. AUD/
The Aussie is also riding high on surging prices for iron
ore, Australia's biggest export, which is near eight-year highs.
The kiwi NZD= rose to its strongest since early 2018 after the
New Zealand's economic growth beat expectations. U.S. Treasuries drifted lower, with the yield on benchmark
ten-year government bonds US10YT=RR up one basis point to
0.9296%.
Asia's outlier was South Korea, where a record daily rise in
coronavirus cases pushed the Kospi .KS11 1% lower and weighed
on the currency KRW= . .KS
Cryptocurrency bitcoin BTC=BTSP extended gains after
breaking past $20,000 overnight. It rose 2% to $21,942.
Investors are attracted by its momentum - it is up 200% this
year - and its purported resistance to inflation because of its
limited supply. Gold XAU= slipped 0.1% to $1,862.16 an ounce. 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 Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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