* U.S. yields bounce after report of $2 trillion stimulus
plan
* Japan's Nikkei hits fresh three-decade peak
* European shares, U.S. futures edge higher
* China tech giants jump after spared from U.S. blacklist
By Marc Jones
LONDON, Jan 14 (Reuters) - Investors shrugged off U.S.
President Donald Trump's record second impeachment and focused
instead on reports on Thursday that his replacement, Joe Biden,
will lay out a new U.S. $2 trillion stimulus programme later.
Hopes for the supersized package lifted most major stock
markets. Japan's Nikkei hit a three-decade peak in Asia .T and
Europe opened 0.4% higher as traders there ignored the prospect
of another Italian government collapse. .FTEU3 .EU
In the bond markets there was starting to be signs of
selling again.
The yield on 10-year U.S. Treasuries US10YT=RR -- the
benchmark for global borrowing costs -- rose two basis points to
1.11% as traders contemplated a $2 trillion Biden COVID aid
package ramping U.S. debt levels up even further.
European yields were being held in place with the region's
stricter COVID lockdowns bolstering bets of more European
Central Bank bond buying, but inflation expectation gauges were
creeping higher.
Luca Paolini, Chief Strategist at Pictet Asset Management,
said an ongoing rise in borrowing rates could unsettle markets
if they start to accelerate.
"It could be a bit difficult," he said. "Although I would
rather have the Fed (U.S. central bank) hiking rates, bond
yields at 4%, growth at 5% rather than everything at zero,
because it's more sustainable."
BLACKLIST BOOST
There had been plenty of action overnight in Asia too.
Japan's Nikkei .N225 hit its highest level since August
1990 taking its surge since late October to 25%. .T
Chinese data showed exports there grew more than expected in
December - pointing to solid global demand - while machinery
orders rose for a second straight month in Japan.
Chinese blue chips .CSI300 eased from a 13-year peak hit
on Wednesday as investors took some profits .SS though it
didn't tell the full story.
The Hong Kong listed shares of Chinese tech giants Alibaba
9988.HK and Tencent 0700.HK and Baidu all rose sharply after
sources told Reuters and the Wall Street Journal that plans to
extend a U.S. investment ban to the stocks had been scrapped.
Alibaba and Tencent alone are worth over $1.3 trillion and
are two of three biggest emerging market stocks in the world,
making up more the 10% of the widely-followed MSCI emerging
market equity index. .MSCIEF
"I think the market is relieved," said Chinese equity
portfolio manager at William Blair Investment Management Vivian
Lin Thurston.
"However, concerns over this risk and therefore volatility
of these stocks may continue in the near future until perhaps
the new (Biden) administration's China strategy becomes clear."
In commodity markets, oil futures nursed modest losses as
fresh surges in coronavirus cases stoke worries about more
lockdowns and lower energy demand.
Brent crude futures LCOc1 were down 0.5% at $55.75 a
barrel and U.S. crude futures CLc1 were at $52.70.
Gold XAU= , which has suffered as U.S. yields have climbed
traded 0.2% lower at $1,840 an ounce - well below a two-month
peak of $1,959 hit a week ago. GOL/
Biden is due to outline his economic plans later on Thursday
and U.S. Federal Reserve Chairman Jerome Powell will also speak,
either one of which could set yields rising again.
"The number one question for global markets and equities
will be when will the Fed start tapering," said Frank Benzimra,
head of Asia equity strategy at Societe Generale in Hong Kong.
"This is where you can get some concern... but at the moment
it is something that is a bit premature."
Currency markets are taking a little more of a wait-and-see
approach, as investors are short dollars and wondering whether
the eventual tapering might limit the greenback's decline. FRX/
The dollar rose 0.2% to 104.12 yen JPY= . The global
recovery-sensitive Australian and New Zealand dollars firmed to
$0.7761 AUD= and $0.7203 NZD= respectively while the euro
EUR= showed modest losses at $1.2151 and 126.42 yen EURJPY= .
"Fresh elections (in Italy) are still very much the outside
bet but it does seem we could be on our way to our 132nd Italian
government in the last 160 years." said Deutsche Bank economist
Jim Reid.
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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
US, euro area inflation expectations https://tmsnrt.rs/35FeBcT
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