* Asian stocks up broadly, Nikkei highest in over five months
* Wall St reaches record peak on round of upbeat global data
* Sterling, Australian dollar make the running as dollar lags
By Wayne Cole
SYDNEY, July 2 Asian stocks scored a three-year peak on
Wednesday after a round of upbeat global economic data whetted risk appetites
and helped Wall Street taste all-time highs.
Dealers said fund managers were rotating money out of bonds and into
equities for the start of the second half of the year, nudging up U.S. Treasury
At the same time, the outlook for super-low rates in the major economies and
an almost eerie absence of volatility across markets, encouraged investors to
take on leveraged bets in search of higher returns - the so-called carry trade.
"Global equity and credit markets are feeling the tailwind of firmer
activity data in the world's largest economies, with the exception of the euro
area," analysts at Barclays wrote in a client note.
"Our global manufacturing confidence recovered from the declines in Q1, and
aggregate forward-looking components suggest the improvement should last well
into the second half."
MSCI's broadest index of Asia-Pacific shares outside Japan
gained 0.38 percent to 495.69, heights not visited since May 2011. Japan's
Nikkei added 0.7 percent to reach its highest in over five months.
The Dow and S&P 500 both scored record closing highs, as did the MSCI world
equity index. The Dow gained 0.77 percent and the S&P 500
0.67 percent, while the Nasdaq Composite put on 1.14 percent.
Top European shares ended up 0.85 percent, despite some
disappointing manufacturing data from the region.
The economic news elsewhere was mostly bright with measures of manufacturing
in China, Japan, the UK and United States all pointing to a pick up in
In an encouraging sign for consumer demand, U.S. auto sales almost reached
17 million annualised in June, way above forecasts and the strongest since 2006.
STERLING, A$ ON THE RISE
With money switching to riskier assets, bond prices gave up some of their
recent gains. Yields on 10-year U.S. Treasuries ticked up to 2.57 percent
, leaving behind last week's lows near 2.50 percent.
Losses should be limited, however, given expectations the Federal Reserve
will keep rates near zero well into next year.
Later on Wednesday, Fed chair Janet Yellen will appear at an event with
International Monetary Fund Director Christine Lagarde and dealers generally
assume she will stick to her recent dovish script.
In currencies, bullish UK data sent sterling to peaks not seen in nearly six
years while the Australian dollar reached an eight-month top after the central
bank sounded resigned the to the currency's strength.
The pound scurried as far as $1.7167, its highest since October
2008. The Aussie jumped almost a cent to above 95 U.S. cents for the
first time since early November. It last traded at $0.9493.
The U.S. dollar was dull in contrast, making only slight gains on both the
euro and yen. Its currency basket index inched up to 79.823
from a two-month trough of 79.740.
Gold eased back a touch to $1,325.39 an ounce having hit a
2-1/2-month high of $1,332.10 on Tuesday.
Brent crude lost 17 cents to $112.12 a barrel, while U.S. crude
was quoted a couple of cents firmer at $105.36.
(Editing by Eric Meijer)