Bonds News

GLOBAL MARKETS-Stocks find relief in China trade surprise

* China exports and imports both beat expectations

* Beijing holds the line on yuan, lessens devaluation fear

* Improved risk appetite lifts stocks, some commodities

* Yen and euro ease back, sovereign bonds give ground

By Wayne Cole

SYDNEY, Jan 13 (Reuters) - Asian shares made their first real rally of the year on Wednesday after Chinese trade data handily beat expectations, offering a rare shaft of light for the global economy.

The Asian giant reported exports dipped 1.4 percent in U.S. dollar terms in December, when analysts had looked for a drop of 8.0 percent. A 4.0 percent fall in imports was also much smaller than many had feared.

While investors harbour suspicions about the reliability of the data, on the surface they offered hope that world trade flows were at least stabilising after a dismal 2015.

It also suggested Beijing might prove successful in its increasingly forceful attempts to steady the yuan, so diminishing the danger of a sustained devaluation.

“China’s trade data support our view that, despite the turmoil in financial markets, there has not been a major deterioration in its economy,” Daniel Martin, senior Asia economist at Capital Economics, said in a research note.

All of which was enough to temper the extreme levels of risk aversion that had built up over recent days.

MSCI’s broadest index of Asia-Pacific shares outside Japan sped ahead by 1.6 percent and away from its lowest since late 2011.

Japan’s Nikkei jumped 2.6 percent while battered Australian stocks gained 1.3 percent. The good cheer spread to E-mini futures contracts for the S&P 500 which climbed 0.8 percent.

Spreadbetters IG were tipping opening gains of around 0.7 percent for the FTSE, 1.2 percent for the DAX and 1 percent for the CAC.

China’s mercurial markets found only fleeting relief, underlining how little their gyrations have to do with economic fundamentals. The Shanghai Composite Index and the CSI300 index were all but flat for the day.

In currency markets, the safe-haven yen found itself temporarily out of favour as the dollar moved up to 118.30 yen from an early 117.61.

The Australian dollar, often used as a liquid proxy for the yuan, rallied over half a U.S. cent at $0.7026, while the euro slipped to $1.0827 from $1.0860.

The dollar rose 0.2 percent against a basket of currencies to 99.156, approaching resistance around the 100 barrier.

Likewise, low-risk sovereign bonds had to surrender a little of their recent gains and yields on 10-year debt nudged up 4 basis points 2.138 percent.

The hint of firmer demand from China provided a reprieve for commodity prices, which have been under the hammer for months.

U.S. crude edged up 40 cents to $30.84 a barrel, a day after breaching the $30 barrier for the first time in 12 years.

Benchmark Brent was quoted 26 cents higher at $31.12 a barrel. U.S. crude had fallen 17 percent in just seven sessions, a gift to consumers across the globe but also a strong force for disinflation. (Reporting by Wayne Cole; Editing by Sam Holmes and Jacqueline Wong)