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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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Nikkei extends bounce, US stock futures edge up

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ECB seen easing on Thurs, Canada may cut on Wed

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Focus on US ISM surveys, May payrolls reports

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Oil prices dip as OPEC+ extends most output cuts

By Wayne Cole

SYDNEY, June 3 (Reuters) - Asian share markets rose on

Monday as investors looked forward to a rate cut in Europe, and

quite possibly Canada, as the next step in global policy easing,

though sticky inflation threatens to make the process a drawn

out affair.

The European Central Bank (ECB) is considered almost certain

to trim rates by a quarter point to 3.75% on Thursday, the first

time in history it would have eased ahead of the U.S. Federal

Reserve.

However, a surprisingly high reading for Euro zone inflation

out last week blunted hopes for a rapid round of reductions and

markets have 55 basis points of easing priced in for this year.

"The probability of back-to-back cuts now appears very low,

putting the focus for a second move on September," said Bruce

Kasman, head of economic research at JPMorgan.

"We suspect President Christine Lagarde will signal that the

direction of rates is downward next week, but the policy

statement will emphasize that future moves are data-dependent,

and there is no pre-commitment to a particular rate path."

Markets also imply around an 80% chance the Bank of Canada

will cut at its meeting on Wednesday and 59 basis points of

easing this year, though analysts are hopeful the easing will be

even deeper.

Investors are a lot less dovish on the Fed, seeing little

prospect of a move until September and even that is far from a

done deal.

The outlook could change this week given data due includes

key surveys on services and manufacturing, and the May payrolls

report where unemployment is seen holding at 3.9% as 190,000 net

new jobs are created.

The prospect of lower borrowing costs globally has been

generally positive for equities, though disappointing economic

news from China somewhat soured the mood in Asia.

MSCI's broadest index of Asia-Pacific shares outside Japan

gained 0.3%, having slid 2.5% last week.

Japan's Nikkei rose a further 1.0%, after rebounding

from one-month lows on Friday.

Indian markets are waiting to see if Prime Minister

Narendra Modi will expand his alliance's majority in parliament

when election results are released on Tuesday, amid speculation

this would lead to more economic reforms.

Month-end flows saw Wall Street stage a late rally on Friday

and left the Nasdaq up almost 7% for May. Early on Monday, S&P

500 futures were up 0.2%, with Nasdaq futures

adding 0.1%.

In forex markets, the Japanese yen remains the weakest of

the majors, though the government is clearly prepared to spend

big to slow its slide. Data out last week showed Tokyo spent

9.788 trillion yen ($62.27 billion) on currency intervention

between April 26 and May 29.

The dollar stood at 157.15 yen, just off last

week's peak of 157.715. The euro held firm at $1.0852,

still benefiting from the EU inflation report, but faces

resistance at $1.0895.

Gold was steady at $2,326 an ounce, having now

rallied for four months in a row helped in part by buying from

central banks and China.

Oil prices initially eased after OPEC+ agreed on Sunday to

extend most of its oil output cuts into 2025, though some cuts

will start to be unwound from October 2024 onwards.

Brent dipped 26 cents to $80.85 a barrel, while

U.S. crude fell 22 cents to $76.77 per barrel.

($1 = 157.1900 yen)