GLOBAL MARKETS-Stocks rally again on expected Fed rate cuts; euro on defensive

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Major Wall St indexes at record highs on rising rate cut
hopes
* Global bond rally continues; Treasury yield hits 32
month-low
* Trade subdued, U.S. financial markets closed for holiday

By Tomo Uetake
TOKYO, July 4 (Reuters) - Asian stocks advanced on Thursday,
tracking sharp gains on Wall Street as recent data from multiple
sectors pointed to slowing economic growth in the United States,
bolstering the prospect of rate cuts by the Federal Reserve.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.3% as did Japan's benchmark Nikkei
.N225 , and Australia .AXJO was up 0.6%. A U.S. public
holiday kept activity somewhat subdued.
On Wall Street, which closed at midday Wednesday for the eve
of the U.S. Independence Day, all three major stock indexes
finished at a record closing highs as expectations grew that the
Fed would take a more dovish turn. .N
A report by a payrolls processor ADP showed U.S. companies
added jobs in June, but fewer than what analysts had forecast,
raising concerns the labour market is softening even as the
current U.S. economic expansion marked a record run last month,
"Stocks and bonds rallied together overnight as the markets
were betting on interest rate cuts at the European Central Bank
and the U.S. Federal Reserve," said Noriko Miyoshi, head of
fixed income at Simplex Asset Management in Tokyo.
"The pace looks too fast. Investors across the world rushed
to take part in the game of yield hunting," she said.
Global sovereign bond rallied overnight. The 10-year
Treasury note yield plunged to 1.939 US10YT=RR , a level last
seen following Donald Trump's election as president in November
2016.
Most 10-year euro zone bond yields NL10YT=RR , AT10YT=RR ,
ES10YT=RR , PT10YT=RR slid to fresh record lows on Wednesday
as investors bet the ECB's dovish stance would continue, while
the 10-year German Bund yield fell to minus 0.399% DE10YT=RR ,
flirting with the ECB's minus 0.40 deposit rate. European Union leaders' nomination of Christine Lagarde, the
head of the International Monetary Fund, to replace Mario Draghi
as president of the ECB, reinforced expectations of more
monetary policy easing if it's needed.
The 10-year Italian bond yield hitting 1.599% IT10YT=RR ,
its lowest since October 2016 as the government eases its budget
ambitions. The market's next focus is U.S. non-farm payrolls for June,
due on Friday.
In the foreign exchange market, the euro traded at $1.1288
EUR= , near its two-week low of $1.1268 set the previous day.
The dollar was little changed at 107.72 yen JPY= , losing
steam as the fall this week in U.S. bond yields.
The British pound stood at 1.2580 GBP=D4 , having hit a
two-week low of $1.2557 as economic data reinforced expectations
that the Bank of England would join its central bank
counterparts in cutting interest rates to shore up a worsening
economic outlook. In commodities, oil prices slipped on Thursday after edging
higher the previous day.
Brent crude futures LCOc1 traded down 0.4% at $63.58 per
barrel in early Asian trade on Thursday, while U.S. crude
futures CLc1 fetched $57.15 per barrel, down 0.3 percent.