* Strong trade numbers burnish outlook for US, global growth
* Dollar rises anew on yen, should support Japanese shares
* ECB under pressure to do more as inflation hits record low
By Wayne Cole
SYDNEY, Jan 8 Asian shares should benefit from
improving risk appetite on Wednesday after strong trade data
boosted expectations for U.S. growth while a lessening of
sovereign strains in Europe lifted stocks there to the highest
The dollar also got a leg up on the yen after the U.S. trade
deficit shrank to its lowest in four years, thanks mainly to a
renaissance in energy production, prompting analysts to revise
up forecasts for economic growth.
Barclays, for one, doubled its estimate for last quarter and
now predicts growth of 3 percent annualised.
Underlining the brighter mood were reports the International
Monetary Fund will lift its forecast for global growth in about
three weeks, breaking a depressingly-long run of downgrades.
All of which helped MSCI's all-country world stock index
hit its highest since mid-2008. The Dow
added 0.64 percent, while the S&P 500 rose 0.61 percent.
The optimism flowed through into Asia on Wednesday with
Nikkei futures pointing to a firmer start and Australian
shares gaining 0.6 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 0.14 percent.
European equity indexes rose to 5-1/2 year highs, led by a
near 3 percent jump in Spain. The FTSEurofirst 300
index of top European shares gained 0.8 percent.
Sovereign risks across the euro zone's periphery have been
receding as longer-term borrowing costs fall to multi-year
Yields on Irish 10-year debt dropped to their lowest in
eight years after the country's first debt sale since exiting
its EU/IMF bailout drew hot demand.
Yet data out Tuesday also showed core inflation in the EU
slowed to a record low of just 0.7 percent in December, fanning
fears of deflation ahead of the European Central Bank's policy
meeting on Thursday.
It was worries about inflation falling too far that led the
central bank to cut interest rates in November.
"This month's data will help reinforce expectations that the
ECB are ready and willing to take whatever steps they deem
necessary to prevent the economy from slipping into deflation,"
said economists at ANZ in a note to clients.
"While we think that the ECB will remain on hold this week,
we are expecting a very dovish statement from ECB President
The uncertainty kept the euro pinned at $1.3614 and
not far from its recent one-month low at $1.3570.
The dollar got a boost from the U.S. trade numbers and
climbed as far as 80.946 against a basket of currencies,
reaching highs last seen in early December. It rallied to 104.68
yen and away from two-week lows of 103.91 set on Monday.
In contrast, investors dumped the Canadian dollar after the
country reported a much larger trade deficit than anyone
expected, in a blow to the economic outlook there.
That saw the greenback jump more than 1 percent to C$1.0782
, the highest since mid-2010, making the currency pair a
standout mover overnight.
The improving news on global growth was generally positive
for industrial commodities and oil.
Brent crude rose 72 cents to $107.45, breaking five
straight sessions of losses. U.S. crude was up 25 cents
Gold fell as a stronger dollar and the rebound in U.S. stock
prices prompted investors to take profits in bullion after five
sessions of gains. Spot gold was at $1,231.15 an ounce,
from a top on Tuesday of $1,245.25.