SYDNEY: Asian stocks fluctuated near two-month highs on Friday, innovating as investors were waiting for US recruitment data, a key release that could make or destroy market expectations of aggressive political relief by the Federal Reserve.
Trading in Global Markets is expected to remain worse after the Independence Day, the US public holiday on Thursday and before the report on non-farm payrolls.
MSCI's widest index of Asia-Pacific shares outside Japan was set to its fifth straight weekly growth. It opened a cross higher at 534.40, a level that has not been seen since the beginning of May. Japan's Nikkei was unchanged at 21,695.9.
E-Minis for the S & P500 rose one touch.
World stocks and bonds have merged since June in the hope that global central banks will keep policies easy to support growth.
All eyes are on US non-farm payrolls, later in the day, which is expected to have jumped by 160,000 in June compared to 75,000 in May.
"But if the numbers confirm the loss of momentum in the labor market or extremely weak, the focus will return immediately to the potential for a 50 basis point cut," ANZ analysts told clients in a note.
Given other US indicators of employment demand have been softer recently, "bias in the market is likely to be skewed to a weaker outcome," ANZ says. Investors also see a 25 percent increase in a 50 basis point cut.
The Fed is not alone in launching a simpler monetary policy, Australia's central bank has cut its cash flow by 50 basis points since June, while the door is dying for a third. This year, the financial markets expect the central bank to postpone the landscape for further monetary easing at the meeting on July 25.
The prospect of global easing has sent government bond yields to several years low around the world.  Germany's 10 -year government bond yield, a benchmark for euro area debt, fell to -0.4 percent and matched the European Central Bank's deposit rate e for the first time – a sign that the markets are expecting cuts.
Yields on US 10-year government bonds hit their lowest since November 2016 on Wednesday.
The foreign exchange market was mostly sidelined in front of the US labor force.
The dollar exchange rate was a cross lower than 96,725 and drifted away from the last two weeks.
The index, which measures the greenback against a basket of large currencies, fell 1.7 percent only last year, as investors were priced at a 50-basis-point cut from the Fed. These expectations had, over the last few days, disappeared on more reserved Fed comments and signs of improvements in Sino-US trade relations, but have since returned to weak US economic data.
A weaker greenback has boosted the Australian dollar despite a fall in prices on Tuesday. Aussie is so far up 1.4 percent in this week and last held at US $ 0.7026.
"With the USD now in uncertainty as to whether the Fed is prepared to cut prices this year, AUD could still enjoy an extended round in the 70s," said BNY Mellon senior currency strategist Neil Mellor.
Against the Japanese yen, the dollar was [$ 1,1784]a touch higher than two weeks low at US $ 1,1268 seen on Wednesday
In commodity markets, oil fell on data showing less than expected US crude stocks and worries about the world economy
Brent crude futures, the international benchmark for oil prices, was a tip weaker at US $ 63.23 a barrel while US crude was eased to US $ 56.69.
Spot gold was higher at US $ 1,417.2 an ounce.
(Editing by Sam Holmes)