(Adds European outlook, updates prices)
By Anshuman Daga
SINGAPORE, May 5 (Reuters) - Asian shares rose to their
strongest in nearly four months on Monday and the dollar held
on to most of last week's gains after jobs data suggested the
U.S. economic slowdown may not be as severe as investors had
expected.
Commodities extended Friday's advance, with gold <XAU=> and
grains <WN8> higher, while Treasuries were flat.
Stock markets in Australia <> and Singapore <.FTSTI>
gained 0.5 percent, while Hong Kong <> was steady. Volumes
were thin as Japan and Korea were closed for national holidays.
UK markets are also shut on Monday.
European equities were set for a weaker start, with
Germany's DAX futures <FDXc1> down 0.2 percent and France's CAC
futures <FCEc1> off 0.4 percent.
By 0600 GMT, MSCI's measure of Asian stocks outside Japan
<.MIAPJ0000PUS> was up 0.2 percent at 498.9 after rising 1.7
percent on Friday. The index hit its highest level since Jan
17.
It jumped 8 percent last month, led by battered financials
on expectations the global credit crisis may have reached a
turning point. Still the index is still down 6 percent this
year.
U.S. stocks ended higher on Friday after data showed The
world's largest economy shedding jobs at a slower pace than
expected, easing concerns about the risk of a deep recession.
The U.S. lost 20,000 jobs last month, fewer than the 80,000
that economists had anticipated. []
Still, investor Warren Buffett, the world's richest person,
said on Sunday the U.S. economy was in recession and banks
would face more pain.
In Asian markets, shares in China's top e-commerce firm
Alibaba.com Ltd <1688.HK> were high profile losers, down 4
percent after Microsoft Corp <MSFT.O> abandoned its bid to buy
for Alibaba's major investor Yahoo Inc <YHOO.O>.
[]
Microsoft's move could be positive for U.S. stocks on
Monday as it is expected to drive up the software company's
heavily weighted shares.
U.S. RATE CUTS ALMOST OVER
Markets will focus on Federal Reserve Chairman Ben
Bernanke's speech on Monday on mortgage delinquencies and
foreclosures.
The U.S. dollar was a shade softer but held on to most of
last week's gains, supported by expectations the Federal
Reserve will not need to cut interest rates again to cushion
the economy from the credit crisis.
"The drop in the unemployment rate has strengthened the
market's conviction that the Fed is done," said Darren Gibbs,
an economist at Deutsche Bank.
The Federal Reserve lowered its benchmark federal funds
rate on April 30 by one-quarter point to 2 percent in what may
be the last in a series of cuts to help the economy cope with a
housing slump and credit market turmoil.
The euro <EUR=> rose to $1.5465 <EUR=>, nearly 0.3 percent
above Friday's late level of $1.5424 but still well below
April's record highs around $1.6018.
The yen remained weak as returning risk appetite encouraged
traders to borrow yen at low interest rates to invest in high
yielding currencies, such as the Australian <AUD=> and New
Zealand <NZD=> dollars. One U.S. dollar bought 105.22 yen,
above a 13-year low of 95.71, hit in March.
The European Central Bank (ECB) and Bank of England are
expected keep rates on hold this week. In Australia, markets
see little chance of an increase in the cash rate at the
central bank's meeting on Tuesday. "The bigger picture for
forex markets remains that we think the ECB is being gradually
forced by the data flow into accepting that interest rates need
to come lower, while the Fed rate cutting cycle is in the end
game," UBS forex strategist Ashley Davies said in a note.
In commodities, oil rose after jumping more than 3 percent
last week, supported by further supply disruptions. U.S. light
crude for June delivery <CLc1> was up 0.2 percent at $116.5 a
barrel.
Gold rebounded as bargain hunters snapped up bullion after
a fall to a four-month low last week, but trading was thin.
Gold <XAU=> rose to $862.95/864.15 an ounce from
$855.80/857.00 an ounce late in New York on Friday, when it
tumbled to $845 an ounce, its lowest since Jan. 2.
(Additional reporting by Wayne Cole)
