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GLOBAL MARKETS-Asia stocks mostly higher before global data test


* Asian share markets mostly higher, Nikkei recoups early
losses

* Dollar on defensive after run of mixed US economic news

* Busy week for global indicators, highlighted by US
payrolls

By Wayne Cole

SYDNEY, June 30 (Reuters) – Asian share markets edged
cautiously higher on Monday while the dollar stayed under
pressure ahead of packed week of economic data that will test
investor hopes for a pick-up in the global economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan
rose 0.3 percent. It gained 0.9 percent last
week to be within a whisker of multi-month highs, aided by the
prospect that interest rates in the major economies will remain
near zero for many months to come.

Most markets across the region were up modestly with Seoul
adding 0.7 percent and Shanghai 0.6 percent.
Japan’s Nikkei recovered from an early stumble to end
0.4 percent higher.

Spread betters in Europe also predicted opening gains of
between 0.1 and 0.3 percent for the FTSE 100, DAX
and CAC 40. The SP 500 EMini contract
was a whisker firmer.

French bank BNP Paribas will be in focus after
sources said the U.S. Justice Department is expected to announce
on Monday a settlement involving a record fine of nearly $9
billion over alleged U.S. sanctions violations.

Bulls are hoping to see evidence of an economic rebound in
the United States in this week’s busy calendar of data that
includes the June payrolls report on Thursday, a day early due
to the July 4 holiday.

Economists polled by Reuters expect jobs to rise 213,000 in
June for the fifth straight month of gains above 200,000, a run
unmatched since the Sept 1999-Jan 2000 period.

The U.S. earnings season also starts in the next couple of
weeks, which will provide evidence on how the economy and
profits are faring.

The Dow ended Friday 0.03 percent higher, though it
was down 0.6 percent on the week. The SP 500 gained
0.19 percent for the day, while the Nasdaq advanced
0.43 percent.

STRETCHING FOR YIELD

With stocks stalled, investors poured more money into bonds
and had to lend for longer to earn any type of real return. That
flow pushed bond prices up and yields down, particularly at the
longer end of the curve.

Yields on 10-year Treasury notes were at 2.532 percent
on Monday, having fallen almost 9 basis points last
week. Likewise, yields on German 10-year paper dropped around 8
basis points to near record lows at 1.26 percent.

Bonds should remain supported, given central banks in the
U.S., Europe and Japan are seemingly committed to super low
rates for the foreseeable future.

Federal Reserve Chair Janet Yellen gives a speech on
“financial stability” on Wednesday and will take questions.

The European Central Bank holds its policy meeting on
Thursday, a month after unleashing a far-reaching package of
measures aimed at keeping the euro zone economy from slipping
into a Japan-style deflation.

Consumer price figures for June are due later on Monday and
should show inflation stuck at a low 0.5 percent, the ninth
consecutive month in the ECB’s “danger zone” of below 1 percent.

Globally, purchasing managers’ indices (PMIs) for
manufacturing are out on Tuesday and services on Thursday. They
are expected to show a picture of growth or at least stability
despite geopolitical tensions around Ukraine and Iraq.

In currencies, the dollar index was last at 80.052,
after dipping as low as 80.010, a level not seen since May 21.

The euro was at $1.3641, near a 2-1/2 week high of
$1.3652 set on Wednesday, while the dollar lost altitude on the
yen to hit a five-week trough of 101.26.

In commodity markets, gold was steady at $1,316.70 an
ounce underpinned by geopolitical unrest in Iraq and Ukraine and
the softer dollar.

Brent crude oil eased 31 cents to 112.99 a barrel,
while U.S. crude futures lost 40 cents to $105.34. Oil
prices have come off recent highs as fighting in Iraq stayed
away from the country’s south, where most of its oil is
produced.

(Editing by Shri Navaratnam and Eric Meijer)

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