* U.S. stocks near record on stimulus, vaccine optimism
* Long-term U.S. bond yields near 13-month peak
* Some investors see Fed revising up economic, rates
forecasts
* European shares seen gaining 0.3-0.5%
* Global asset performance http://tmsnrt.rs/2yaDPgn
By Hideyuki Sano
TOKYO, March 15 (Reuters) - Global stock prices inched
higher while U.S. bond yields hovered near a 13-month peak on
Monday as investors bet U.S. economic growth will accelerate
after the $1.9 trillion stimulus bill President Joe Biden signed
into law last week.
The rollout of COVID-19 vaccinations in the United States
and some other countries stoked a bullish mood on risk assets
even as investors become wary of key central bank policy
meetings later in the week, including the U.S. Federal
Reserve's.
"The U.S. is now vaccinating more three million people a
day, with President Biden now saying all adults will be able to
get a shot by May 1. It could soon achieve a herd immunity and
an economic normalisation," said Norihiro Fujito, chief
investment strategist at Mitsubishi UFJ Morgan Stanley
Securities.
European shares are expected to open higher, with Euro Stoxx
50 futures STXEc1 up 0.3% and FTSE futures FFIc1 trading
0.5% higher.
U.S. S&P500 futures ESc1 rose as much as 0.37% in Asia
before erasing gains, trading just below a record high level
touched last week, while Japan's Nikkei .N225 ticked up 0.2%.
Mainland Chinese shares, however, dropped despite data
showing a quickening in industrial output and a rise in retail
sales, with bluechip CSI 300 index .CSI300 falling 2.6% on
policy tightening worries. Surveillance equipment maker Hikvision 002415.SZ lost 3.2%
after the U.S. Federal Communications Commission (FCC)
designated the firm, along with four others Chinese companies
including Huawei Technologies HWT.UL , as posing a threat to
national security. The fall in Chinese shares helped to drive MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down
0.7%.
FILLING THE HOLE
The U.S. House of Representatives gave final approval last
week to the COVID-19 relief bill, giving Biden his first major
victory in office. "Most market participants and policy-makers have been
surprised by the speed of the recovery. On our estimates, the
U.S. economy will reach pre-COVID-19 output levels by the
current quarter," said Chetan Ahya, global head of economics at
Morgan Stanley in New York, in a note.
"Fiscal policy is doing much more than fill the output hole.
Transfers to households have already exceeded the income lost in
the recession. As reopening gathers pace, the labour market is
poised for a sharp rebound."
Investors also suspect the $1.9 trillion package, which
amounts to more than 8% of the country's GDP, could stoke
inflation - to the detriment of bonds, especially when their
yields are so low.
Rising inflation expectations could prompt the Federal
Reserve to signal it will start raising rates sooner when it
announces its latest economic projections at the end of Federal
Open Market Committee (FOMC) meeting on Wednesday.
"Following the fiscal stimulus packages it is inevitable
that Fed GDP forecasts will be revised up, and some FOMC members
might think rates will have to move higher sooner than they
anticipated last December," wrote economists at ANZ.
The 10-year U.S. Treasuries yield stood at 1.634%
US10YT=RR , having risen to as high as 1.642% on Friday, a high
last seen in February last year.
Higher U.S. bond yields saw the dollar rising against other
major currencies.
The euro slipped 0.2% to $1.1929 EUR= from last week's
high of $1.1990 while the dollar hit a nine-month high of 109.27
yen JPY= .
The British pound slipped 0.5% to $1.3902 GBP=D4 .
Bitcoin BTC=BTSP briefly slipped to $58,742, off a record
high of $61,781 hit on Saturday, after Reuters reported a senior
Indian government official said Delhi will propose a law banning
cryptocurrencies, fining anyone in the country trading or even
holding such digital assets. Oil prices were supported by production cuts by major oil
producers and optimism about a demand recovery as the global
economy recovers from the pandemic-induced recession.
U.S. crude futures traded at $65.99 per barrel CLc1 , up
0.6% on the day.
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