* U.S., China trade negotiators hold call
* MSCI Asia Ex-Japan adds 1.1%
* Earnings, lockdown easing hopes boost shares
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith and David Henry
SHANGHAI/NEW YORK, May 8 (Reuters) - Asian shares rose on
Friday as investors focused on talks between U.S. and Chinese
trade officials and solid corporate earnings rather than the
looming release of data expected to show the worst U.S.
unemployment rate in more than 70 years.
Having opened higher following gains on Wall Street
overnight, Asian markets had a further boost late in the morning
on Chinese state media reports that U.S. and Chinese trade
representatives had held a phone call and pledged to cooperate
on carrying out the countries' Phase 1 trade deal. The news lifted U.S. stock futures, pushing E-minis for the
S&P 500 ESc1 up 1.06% to 2,910.5.
MSCI's broadest gauge of Asian share indexes outside Japan
.MIAPJ0000PUS was 1.1% higher and Japan's Nikkei added 1.78%.
Australian shares .AXJO were 0.76% higher. China's
blue-chip CSI300 index .CSI300 gained 0.86%.
While rising equity markets on Friday were accompanied by a
slight uptick in U.S. Treasury yields, bond markets remained
focused on the shaky global economic picture as
coronavirus-related lockdowns continue to depress economic
activity, despite signs of reopening.
"The equity market is disconnected and optimistic ... We've
got this bizarre scenario at the moment, where the bond market
is really looking at the doomsday economic data and also hopes
for potentially further support from the U.S. Federal Reserve,"
said Ryan Felsman, senior economist at CommSec in Sydney.
Data from Japan on Friday showed the impact of lockdowns,
with household spending plunging 6% on year in March, and
service-sector activity shrinking at a record pace. Wall Street indexes climbed on Thursday, with the Nasdaq
erasing losses for 2020, following a clutch of upbeat earnings.
PayPal Holdings PYPL.O soared 14%. After hitting a record lows of 0.129% on Thursday, the yield
on U.S. two-year Treasurys US2YT=RR ticked up to 0.1368%,
while the benchmark 10-year note US10YT=RR edged back up to
0.644% from the previous day's close of 0.631%.
The yield on the 30-year bond US30YT=RR rose to 1.3342%
from a close of 1.321% Thursday.
Bond markets were jolted this week, and the U.S. yield curve
steepened after the U.S. Treasury Department said it would
introduce a long-planned 20-year bond and expected to borrow
$2.999 trillion in the second quarter.
But yields fell from three-week highs on Thursday as
investors digested the prospect of a surge in debt supply and as
some saw a dim outlook for the economy as it emerges from virus
lockdowns.
Federal funds futures 0#FF continued to show expectations
of negative U.S. interest rates on Friday, even as Federal
Reserve officials have said such a development would be bad for
the economy.
Looming on the market horizon is a report on Friday that is
expected to show that the U.S. April unemployment rate jumped to
16% as people stayed home to thwart the spread of the novel
coronavirus.
Markets had a foretaste with weekly claims for unemployment
benefits that added up to some 33.5 million people over the past
few weeks, roughly one of every five American workers.
In currency trading, the dollar index =USD falling 0.171%
to 99.646 after hitting a two-week high on Thursday as some
investors took profits ahead of the jobs report. The euro EUR= rose 0.17% to buy $1.0850, but the dollar
was steady against at 106.33 yen JPY= .
Oil prices rose on hopes that easing lockdowns would boost
demand. Brent LCOc1 futures were up 29 cents, or 0.98%, at
$29.75 a barrel, while U.S. crude CLc1 added 28 cents, or
1.19%, to $23.83.
After rising more than 2% on Thursday in anticipation of
weak U.S. jobs data, spot gold XAU= edged down 0.1% to
$1,715.72 an ounce.
(Editing by Simon Cameron-Moore)