* Stocks and bonds find modest support from ECB easing
* Euro rebounds sharply as some doubt ECB action is enough
* Uncertainty high on US jobs report, wide gulf in forecasts
By Wayne Cole
SYDNEY, June 6 Asian markets turned mixed on
Friday as investors offered only polite applause for the
European Central Bank's latest stimulus package, while the euro
became an unlikely star following a sharp short-covering rally.
Trading was hesitant as attention quickly shifted to the
U.S. payrolls report due later on Friday where the outcome is
considered even more uncertain than usual.
While the median forecast is for a solid jobs gain of
218,000, estimates range from a little as 110,000 to as high as
The ECB action provided enough of a boost to risk sentiment
to generate a 0.3 percent lift in MSCI's broadest index of
Asia-Pacific shares outside Japan.
"From a broader perspective, the ECB's latest easing
measures are important," said Frederic Neumann, co-head of Asian
economics research at HSBC.
"They underline our call that global liquidity should remain
highly accommodative for emerging markets and Asia in particular
for the foreseeable future."
Japan's Nikkei went flat after again shying away
from testing April's peak at 15,164. Speculation that more
government pension funds will flow into the market helped
Financial spreadbetters expected Britain's FTSE 100
to open up 0.3 percent, Germany's DAX to gain as much
as 0.4 percent and France's <CAC 40> also 0.4 percent.
Wall Street had notched up new records with the Dow
up 0.59 percent and the S&P 500 0.65 percent, while the
Nasdaq managed a 1.05 percent gain.
The gains came after the ECB cut interest rates to record
lows and launched a series of measures to pump money into the
sluggish euro zone economy.
Still, ECB President Mario Draghi implied this would be the
low point for rates and the bank stopped well short of
quantitative easing (QE).
Draghi did emphasise that more action would be taken if
needed, but markets are only too well aware that it usually
takes ages for the central bank to actually move. The last time
the ECB announced such a big package was in August 2012 - a gap
of almost two years.
EURO DEFIES GRAVITY
Indeed, dealers noted that the new targeted liquidity
offerings announced on Thursday would not be set until September
and December, suggesting the ECB might be done for this year.
That could be one reason the euro recouped all its initial
heavy losses to be up at $1.3660 on Friday, a huge
reversal from Thursday's trough of $1.3505.
The bounce reaffirmed the strength of support around $1.3500
and could see the single currency test major chart resistance at
$1.3688/90, a break of which would be bullish technically.
The euro's rebound in turn pushed the dollar down across a
host of currencies from sterling to the Swiss franc
and Australian dollar. The dollar index sank back
to 80.353 having been as high as 81.020 on Thursday.
The dollar's losses on the yen were more limited, easing
around 30 pips or so to 102.35.
China's yuan strengthened against the dollar after the
central bank fixed its official midpoint up 0.14 percent at
6.1623, the biggest single-day gain since early January, as the
dollar slid against a basket of currencies.
The fixing increase fanned speculation over whether China is
preparing set put the yuan back on an appreciation course after
guiding it downward by over 3 percent in the first half of the
year, but Chinese forex traders were cautious.
Global bond markets seemed moderately cheered that a major
central bank was still having to ease policy, and yields were
generally lower. The euro zone periphery benefited most with
Spanish 10-year yields down 5 basis points at 2.83 percent
and close to historic lows.
Yields on two-year U.S. Treasury notes were at 0.38 percent
after dipping 2 basis points on Thursday, while those
on 10-year paper fell a tick to 2.58 percent.
Gold was up at $1,254.60 having enjoyed its biggest
gain in three weeks overnight as buyers were encouraged by the
prospect of yet lower rates for longer in the euro zone.
Oil prices edged ahead, with U.S. crude up 6 cents at
$102.54, while Brent crude rose 12 cents to $108.91.
(Editing by Eric Meijer)