* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Alun John and Tom Westbrook
SINGAPORE, Oct 6 (Reuters) - Asian stock markets advanced to
a two-week high on Tuesday after U.S. President Donald Trump was
discharged from hospital following treatment for COVID-19 and as
prospects for a fresh U.S. stimulus package appeared to
brighten.
Bonds and the dollar nursed losses amid the improving risk
appetite, while oil extended gains.
Trump returned to the White House on Monday after a
three-night hospital stay and said he felt "real good", though
one of his doctors cautioned that he may not be out of the woods
yet. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.71% to a two week-high, led by Hong Kong
.HSI climbing 0.88%. Japan's Nikkei .N225 also added 0.41%.
Separately, U.S. House Speaker Nancy Pelosi and Treasury
Secretary Steven Mnuchin spoke by phone for about an hour and
were preparing to talk again Tuesday, continuing their work
towards a deal on coronavirus relief spending. As well as Trump's health, "there is also some market
attention on whether the U.S. Congress will pass the extra
stimulus bill," said Tai Hui, Chief Asia Market Strategist, J.P.
Morgan Asset Management
"If we do see some form of stimulus coming through, I think
the market will take it in a positive light as much of the
important support from the previous round has expired," he said.
S&P 500 futures ESc1 rose 0.08% after the best daily gain
on the S&P 500 index .SPX in a month overnight. Oil held sharp
overnight gains. O/R
Australia's ASX 200 .AXJO was more subdued, up 0.17%,
ahead of a central bank meeting at 0330 GMT and the government's
budget later in the day.
China's markets remain closed for a holiday.
Asian markets on Monday unwound most of a Friday selloff in
the wake of Trump's COVID-19 diagnosis. That improvement also
caused Wall Street to rally sharply overnight with energy, tech
and healthcare stocks leading. The Dow .DJI rose 1.7%, the S&P
500 1.8% and the Nasdaq .IXIC 2.3%. .N
Bond markets also joined in, with the safe-haven asset being
sold - especially at the long end - in line with the optimistic
mood. The yield on U.S. 30-year government bonds US30YT=RR
rose 10 basis points to a four month high of 1.5930%, before
easing slightly. US/
Benchmark 10-year yields US10YT=RR hit a more than
five-week high, and held just shy of that in Asian morning
trading at 0.7634%.
"Improved near-term stimulus prospects and then potentially
bigger deficits under a Biden presidency that has the benefit of
clean sweep, are behind the yield gains here," said Ray Attrill,
head of FX strategy at National Australia Bank in Sydney.
In currency markets, the dollar was under pressure on other
majors apart from the yen, since higher yields can often draw
flows from Japan. FRX/
The yen JPY= hovered at 105.7 per dollar, while the
risk-sensitive Australian and New Zealand dollars edged ahead,
with the Aussie AUD=D3 last up 0.13% at $0.7191.
Oil jumped more than 5% overnight and held there in Asia,
supported by optimism surrounding Trump's health and a supply
squeeze as a strike shut six Norwegian offshore oil and gas
fields. O/R
The strike will cut Norway's total output capacity by just
over 330,000 barrels of oil equivalent per day, or about 8% of
total production, according to the Norwegian Oil and Gas
Association (NOG).
U.S. crude CLc1 last stood at $39.27 up 0.13% and, Brent
crude LCOc1 rose 0.2% to $41.37. Gold XAU= was steady at
$1,912 an ounce.