GLOBAL MARKETS-Asian stocks rally, battered bond market tries for stability

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia ex-Japan index +1%, Nikkei bounces 2.1%
* US 10yr yields dip to 1.40% vs last week 1.61% peak
* US stimulus bill progresses, J&J vaccine due Tuesday
* Oil prices rise anew ahead of OPEC meeting

By Wayne Cole
SYDNEY, March 1 (Reuters) - Asian shares rallied on Monday
as some semblance of calm returned to bond markets after last
week's wild ride, while progress in the huge U.S. stimulus
package underpinned optimism about the global economy and sent
oil prices higher.
China's official manufacturing PMI out over the weekend
missed forecasts, but Japanese figures showed the fastest growth
in two years. Investors are also counting on upbeat news from a
raft of U.S. data due this week including the February payrolls
report. Helping sentiment was news deliveries of the newly approved
Johnson & Johnson JNJ.N COVID-19 vaccine should start on
Tuesday.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up 1%, after shedding 3.7% last Friday.
Japan's Nikkei .N225 rallied 2.1%, while Chinese blue
chips .CSI300 added 0.8%.
NASDAQ futures bounced 1.2% NQc1 and S&P 500 futures
ESc1 0.8%. EUROSTOXX 50 futures STXEc1 and FTSE futures
FFIc1 both rose 1.0%.
Yields on U.S. 10-year notes US10YT=TWEB held at 1.40%,
from last week's peak of 1.61%. They climbed 11 basis points
last week to be up 50 basis points on the year so far.
"The bond moves on Friday still feel like a pause for air,
rather than the catalyst for a move towards calmer waters," said
Rodrigo Catril, a senior strategist at NAB.
"Market participants remain nervous over the prospect of
higher inflation as economies look to reopen aided by vaccine
roll outs, high levels of savings along with solid fiscal and
monetary support."
Analysts at BofA noted the bond bear market was now one of
the most severe on record with the annualised price return from
10-year U.S. govt bonds down 29% since last August, with
Australia off 19%, the UK 16% and Canada 10%.
The rout owed much to expectations of faster U.S. growth as
the House passed President Joe Biden's $1.9 trillion coronavirus
relief package, sending it to Senate. BofA's U.S. Economist Michelle Meyer lifted her forecast for
economic growth to 6.5% for this year and 5% next, due to the
likelihood of the larger stimulus package, better news on the
virus front and encouraging data.
U.S. virus cases were also down 72% since a Jan. 12 peak and
hospitalisations are following closely behind, BofA added.
Higher U.S. yields combined with the general shift to safety
helped the dollar index rebound to 90.787 =USD from a
seven-week low of 89.677.
On Monday, the euro was steady at $1.2083 EUR= , compared
to last week's peak of $1.2242, while the dollar held near a
six-month top on the yen at 106.60 JPY= .
"Riskier" currencies and those exposed to commodities
bounced a little after taking a beating late last week, with the
Australian and Canadian dollars up and emerging market
currencies from Brazil to Turkey looking steadier.
Non-yielding gold was still nursing losses after hitting an
eight-month low on Friday en route to its worst month since
November 2016. It was last at $1,750 an ounce XAU= , just above
a trough around $1,716.
Oil prices extended their gains ahead of an OPEC meeting
this week where supply could be increased. Brent gained 4.8%
last week and WTI 3.8%, while both were about 20% higher over
February as a whole. O/R
Brent LCOc1 was last up $1.11 at $65.53, while U.S. crude
CLc1 rose $1.04 to $62.54 per barrel.

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(Editing by Shri Navaratnam and Lincoln Feast.)