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GLOBAL MARKETS-Asian stocks near 3-week top, dollar eases after U.S. inflation

Published 2018-05-10, 08:52 p/m
© Reuters.  GLOBAL MARKETS-Asian stocks near 3-week top, dollar eases after U.S. inflation
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* MSCI ex-Japan climbs 0.3 pct, Nikkei jumps 0.7 pct

* U.S. April consumer price index rises slower than expected

* Traders trim expectations of faster U.S. rate hikes in 2018

* Risk appetite whetted on U.S.-Korea summit talks in Singapore

By Swati Pandey

SYDNEY, May 11 (Reuters) - Asian markets started on a firm footing and the dollar eased on Friday as softer-than-forecast U.S. inflation data tempered expectations for faster Federal Reserve interest rate rises this year.

Investor sentiment also got a small boost after U.S. President Donald Trump said he had high hopes of "doing something very meaningful" to curtail North Korea's nuclear ambitions at a summit in Singapore next month. signs of thawing relationships in the Korean peninsula and the prospect of still expansionary monetary policies in most of the developed world helped whet risk appetite, although concerns remained around U.S.-China trade skirmishes and rising tensions in the Middle East.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose for a second straight session to near three-week highs.

Japan's Nikkei .N225 climbed 0.7 percent while South Korea's KOSPI .KS11 added 0.6 percent. Australian and New Zealand shares were both up 0.2 percent. .AXJO .NZ50

On Wall Street, the Dow .DJI rose 0.8 percent, the Nasdaq Composite .IXIC gained 0.89 percent and the S&P 500 .SPX rose 0.9 percent, surging past key resistance of 2,717 points.

Equities gained as investors trimmed their expectations for four Fed rate hikes after inflation data showed price pressures remained weak. The Fed has already raised rates once this year and is widely expected to go twice again in 2018. FEDWATCH

The U.S. consumer price index rose 0.2 percent last month, below analyst forecasts of 0.3 percent, as a moderation in healthcare prices offset increases in the cost of gasoline and rental accommodations. dollar fell the most since late March overnight against a basket of major currencies .DXY , while the Mexican peso MXN= and Brazilian real BRL= jumped more than 1 percent on the news.

The British pound GBP= hit a four-month low versus the greenback after the BoE held key borrowing costs. It was last at $1.3517, just above Thursday's trough of $1.3457 touched.

The recent slowing in price growth in major economies has boosted expectations that most central banks except the Fed will continue their massive bond-buying programmes to keep policy stimulatory.

"Risk appetite rose overnight with U.S. core inflation and unchanged Bank of England both signalling only gradual normalisation in interest rates," ANZ analysts said in a note.

"Equities liked the contained inflation/rates environment."

On Friday, the dollar index .DXY rose modestly while the euro EUR= was barely changed at $1.1915. The Japanese yen JPY= was a tad weaker at 109.52 per dollar.

Malaysian markets were closed Friday but its newly appointed Prime Minister Mahathir Mohamad emerged with key election pledges including repealing an unpopular goods and services tax and restoring a petrol subsidy.

Ratings agency Moody's said some campaign promises would be "credit negative" for Malaysia.

Such concerns pushed up the cost of insuring against a Malaysia default, with the country's 5-year credit default swap price MYGV5YUSAC=R at its highest since early June 2017 at 95.090 basis points. commodities markets, spot gold was steady at $1,21.32 an ounce.

Oil hovered near multi-year peaks amid supply concerns after Trump withdrew from an Iranian nuclear deal and reinstated sanctions.

U.S. crude futures CLc1 were up 14 cents at $71.5 a barrel. Brent crude futures LCOc1 was last quoted at $77.47 a barrel, after hitting $78 earlier in the day, their highest since November 2014.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ MSCI and Nikkei chart

http://reut.rs/2sSBRiD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes)

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