* Euro in sharpest daily rally in 2 months
* Greece rescue package whets demand for riskier assets
* Asia shares up hit 22-month highs; U.S. stock futures
rise
* Commodities firm; gold 4-month high; copper 22-month peak
(Repeats to additional subscribers)
By Koh Gui Qing
SYDNEY, April 12 (Reuters) - The euro jumped its most in
two months on Monday, and Asian stocks hit 22-month highs after
a giant emergency aid plan for Greece allayed worries of a
breakout of fiscal tensions across Europe.
"We have a perfect recipe today: the news from Greece, Wall
Street is positive and, together with the M&A activity,
investors are encouraged to take risks," said Chris Weston, a
dealer at IG Markets in Sydney, referring to takeover activity
in Australia.
In what may be the biggest multilateral financial rescue
ever, the euro zone and the IMF threw debt-laden Greece a
lifeline over the weekend by pledging at least 40 billion euros
($54 billion) in aid, although Athens has yet to use it.
[]
The size of the rescue plan, which was on the high side of
market expectations, soothed worries about Greece defaulting on
its debt in the near term and creating a domino effect on other
countries with deep fiscal problems.
The euro <EUR=> jumped 1.3 percent to $1.3663 as investors
reversed their short positions in the currency on the news. It
looked set to test $1.3817, its March 17 high, after breaching
its 55-day moving average at around $1.3637.
A relief rally on the aid plan lifted demand for
commodities, stocks and riskier debt, and looked set to carry
over into European trade.
Financial spreadbetters expected Britain's FTSE 100
<>, Germany's DAX <> and France's CAC-40 <> to
open as much as 0.4 percent higher.
Investors have feared that Greece's debt crisis and fiscal
weakness elsewhere in Europe could threaten a steadily healing
global economy. Data last week showed euro zone growth stalled
in the fourth quarter last year, though other surveys showed it
may have regained traction in recent months. []
A raft of Chinese economic data due this week could add
further evidence the global rebound is picking up steam. China
will release its first-quarter GDP report, with analysts
forecasting growth of 11.5 percent from a year ago. <ECONCN>
Asian stocks, which have managed to grind higher in recent
weeks despite uncertainty about Greece's fiscal health, got a
lift from the relief rally too.
A strong performance from U.S. stocks on Friday also lent
support. The Dow Jones industrial average <> had crossed
the 11,000 market for the first time in a year and a half. []
The MSCI index for Asian stocks outside Japan
<.MIAPJ0000PUS> rose as much as 0.6 percent to levels last seen
in June 2008, before giving up gains to stand little changed by
the afternoon.
Underscoring the preference for risk, U.S. Treasuries []
were a shade weaker, while yields for 10-year Indonesian bonds
hit 20-month lows of around 8.9 percent. []
Investors have raced for Indonesian bonds in the past year,
enticed by their high yields and Indonesia's improving outlook.
A SHORT-LIVED RALLY?
Still, some analysts warned the cheerful tone in markets
may prove short-lived as Greece is still saddled with a
mountain of debt. []
Greece owes more money than it earns from its annual output
of goods and services. The country has 300 billion euros worth
of debt, which is 1.25 times its annual gross domestic
product.
"This move will help funding by Greece a bit easier, but I
don't think the problem will disappear," said Robert Rennie,
chief currency strategist at Westpac in Sydney.
"The way the market is short euro, this could give the leg
up to around the next technical resistance at $1.3820. But can
it sustain a move higher than that, I am not sure."
The euro has taken a beating from Greece's fiscal woes.
Even after Monday's rally, it is still the worst performer
among major currencies this year, having lost 4.8 percent.
For now, investors seemed to have some faith in the plan.
Commodity prices were up, although gains were exaggerated
by a softer U.S. dollar on the back of the euro's rally.
Oil <CLc1> rose 34 cents to $85.25 a barrel [], while
gold <XAU=> climbed 0.5 percent to its highest in four months.
[]
London copper futures hit 20-month highs of $8,042.75 a
tonne. [] Copper is seen by some as a barometer of
industrial activity due to its wide usage on construction and
telecommunications.
Higher-yielding commodity currencies also benefitted. The
Australian dollar <AUD=> hit a five-month high, while the New
Zealand dollar <NZD=> was at its highest in 2-
