GLOBAL MARKETS-Asia stocks, Aussie recover from two-day drop

                                
 * MSCI Asia ex-Japan up more than 2 pct on techs, banks
                                
 * Aussie jumps, some cross/yen short-covering seen
                                
 * NZ swap rates retreat before expected RBNZ rate cut
                                
 * Japan markets closed as Golden Week holidays begin
                                
 By Eric Burroughs
                                
 HONG KONG, April 29 (Reuters) - Asia stocks and the
Australian dollar bounced back on Wednesday from a two-day
slide, with investors taking heart from data showing the U.S.
economy slowly healing while keeping an eye on the spread of
swine flu around the world.
                                
 Futures on European equity indexes were up between 0.4
percent and 0.6 percent, signalling a positive start to trade.
                                
 The yen slid against higher-yielding currencies on
improving risk appetite after data showing U.S. consumer
confidence posting its biggest monthly jump in three years and
tumbling home prices starting to slow from a record pace.
[ID:nN28304426]
                                
 The signs of gradual recovery in the struggling U.S.
economy helped ease some of the worries about the impact of the
swine flu and reports that top U.S. banks will need to raise
more capital after the government stress tests.
                                
 But investors were still on high alert over the risk of
swine flu being declared a pandemic and the potential economic
damage.
                                
 "The sentiment is not that of panic but that of caution.
There is no indication on how bad the situation may get, so
investors are guarded about taking new positions," said Alex
Wong, director with Ample Finance Group in Hong Kong.
                                
  "Though Hong Kong has the SARS experience behind it, there
are fears that this swine flu may be different and could
potentially do more damage" he said.
                                
 A global hunt turned up new infections all around the
world, and frightened governments warned people to stay away
from Mexico, where up to 159 people have died. [FLU/]
                                
 The number of infections in the United States rose to 65
[nN28350228], Canada has 13 [nN28338742] and new cases were
also confirmed in Israel and New Zealand. But global health
officials cautioned that the numbers meant little in a rapidly
changing situation.
                                
 Seoul's KOSPI index <.KS11> climbed 2.9 percent, led by
shares of technology companies like Samsung <005930.KS> and LG
Electronics <066570.KS>, as well as banks.
                                
 Analysts were still cautious about how much further shares
could rise given the still severe troubles gripping the global
economy.
                                
 "In order for the index to make a meaningful rebound, we
need clearer signs that the global economy and corporate
earnings will pick up by 2010, but we haven't seen those yet,"
said Choi Seong-lak, a market analyst at SK Securities in
Seoul.
                                
 The MSCI index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> rose about 2.3 percent after the U.S. S&P 500
<.SPX> slipped just 0.3 percent overnight. S&P futures <SPc1>
were up 0.8 percent in Asia.
                                
 Trading was limited due to a holiday in Japan, which begins
its Golden Week string of holidays that continue next Monday
through Wednesday. Many markets in Asia and around the world
will also be closed on Friday for May 1 holidays.
                                
 Market players are looking ahead to U.S. first-quarter GDP
figures and the outcome of the Federal Reserve's two-day policy
meeting later in the day.
                                
 The Fed is not expected to make any big changes at this
meeting after shocking investors last time with its decision to
make large-scale outright purchases of Treasuries.
                                
 AUSSIE JUMPS, NZ SWAP RATES DOWN
                                
 The Australian dollar -- still among the most sensitive
currencies to shifts in risk appetite due to its relatively
high yield -- jumped 1.3 percent to $0.7147 <AUD=D4> and gained
1.6 percent against the yen <AUDJPY=R>.
                                
 Traders said some short-term speculators were covering
short positions in Aussie/yen and other yen cross currencies,
which tend to move in line with stocks, that were taken on news
of the swine flu outbreak at the start of the week.
                                
 The dollar climbed 0.4 percent to 96.75 yen <JPY=> and
recovered from a one-month low hit the previous day, while the
euro was up 0.9 percent to 127.70 yen <EURJPY=R>.
                                
 As stock markets around the world rallied about 30 percent
from their early March lows, market players also favoured
traditional carry trade players in currencies -- borrowing
cheap funds in low-yielding currencies such as the yen to buy
higher-yielding ones.
                                
 In New Zealand, rates on interest-rate swaps <NZDIRS> fell
further, a day before the Reserve Bank of New Zealand
<NZCASH=RBNZ> is expected to cut rates by a half-point to a
record low 2.5 percent at a policy meeting. [NZ/POLL]
                                
 But short-term rate markets are not pricing in a full 50
basis point cut as most analysts expect. [ID:nSP185493]
                                
 Market players were caught off guard after the RBNZ
cautioned at its last meeting that its needs to retain
competitiveness in global markets -- a phrase taken to mean
sufficiently high interest rates to attract foreign capital to
cover its large current account deficit.
                                
 One-year swap rates fell 10 basis pints to 2.955 percent
and were just 14 basis points above a record low hit in early
March.
 (Additional reporting by Jungyoun Park in Seoul and Parvathy
Ullatil in Hong Kong; Editing by Mathew Veedon)