GLOBAL MARKETS-Stimulus splurge restarts stocks rally

* Equities rally as stimulus soothes second wave worries
* Fed announces start of corporate bond buying programme
* Bank of Japan increases support for cash-strapped firms
* Treasury and Bund yields edge higher
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Marc Jones
LONDON, June 16 (Reuters) - The global stocks rally was back
on track on Tuesday, with more support from the Federal Reserve
and the Bank of Japan helping end a bumpy few days for financial
markets.
A nearly 5% jump by Japan's Nikkei .N225 ensured the best
day for Asian equities .MIAP00000PUS since late March and
almost 2% rises from London, Paris and Frankfurt got Europe off
to a fast start. .EU 0#.INDEXE
Talk that U.S. firms may be allowed to work with China's
Huawei on new 5G standards eased trade jitters, and a report of
a new $1 trillion U.S. infrastructure programme also boosted
markets.
"It is a buy-the-dip mentality," John Hardy, head of FX
strategy at Saxo Bank, said after risk-sensitive currencies such
as the Australian dollar AUD= also made gains overnight.
"But the degree and the speed that things are melting back
in FX now is telling... you feel like you can't really trust
these moves."
That melt saw the dollar =USD firm up at 96.62, having
dropped almost 1% from Monday's high of 97.396. The Aussie
AUD=D3 was also backsliding, having risen more than 2% off a
two-week low in Asian trading. /FRX
The euro and yen were both barely budging at $1.1333 EUR=
and 107.33 JPY=D3 yen per dollar. The Bank of Japan had
increased its lending packages for cash-strapped firms to $1
trillion from about $700 billion, but had also kept rates
steady, sticking to its view that the Japanese economy will
gradually recover from the impact of the coronavirus pandemic.

The Fed also announced on Monday eagerly-awaited details of
its programme to lend funds directly to companies.
The facility, which began purchasing shares of
exchange-traded funds in mid-May, is one of the Fed's recently
created tools meant to improve market functioning after the
coronavirus.
Benchmark 10-year Treasury yields notes US10YT=RR edged up
to 0.74% in response, and the spread between two-year and
10-year yields US2US10=TWEB widened to 54 basis points in
another sign of improving risk appetite.
German, French, Dutch and other core yields rose in Europe
too, and riskier Italian yields fell to their lowest since the
end of March. GVD/EUR
"In absence of a further surge in new (coronavirus)
infections in China or the US, the market hopes about monetary
and fiscal tailwinds alongside improving sentiment indicators
should prevail," Commerzbank strategists wrote.
Oil prices also steadied in commodity markets as lingering
concerns over fuel demand from the resurgence of new coronavirus
infections were cushioned by hopes of further cuts in crude
supplies. O/R
U.S. crude CLc1 was trading up 1.2% at $37.58 a barrel,
after falling 1.2%, and Brent crude LCOc1 also rose 1.5% to
$40.34 per barrel.
Improving sentiment also pushed up Wall Street futures with
e-Minis for the S&P 500 ESc1 rising 1.6%. U.S. markets had
made a late dash to finish higher on Monday.

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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
S&P 500 market cap, daily moves https://tmsnrt.rs/2YCDodm
Asset performance vs outbreak https://tmsnrt.rs/2YF3T1T
Stocks and oil versus COVID-19 cases https://tmsnrt.rs/3cXWNdO
Asia stock markets https://tmsnrt.rs/2zpUAr4
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