Asia stocks makes tentative start to event-full week

SYDNEY (Reuters) - Asian share markets got off to s sluggish start on Monday in a packed week for global economic news that is book ended by the U.S. jobs report, a key input into the Federal Reserve's decision on when to start lifting rates.

Trading was also thinned by the absence of Japanese markets which are on holiday from Monday to Wednesday. MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.2 per cent.

Australian stocks were a fraction lower on concerns over bank earnings while South Korea's main index inched up 0.2 per cent.

A private measure of Chinese manufacturing activity due later on Monday is expected to stay subdued and only add to speculation of more policy stimulus there.

The HSBC/Markit PMI for South Korea set an ill omen, falling to a six-month trough of 48.8 in April.

The British election on Thursday will add political uncertainty to the mix, with neither of the major parties likely to win a clear majority of seats.

On Wall Street, the Dow had ended Friday up 1.03 per cent, while the S&P 500 gained 1.09 per cent and the Nasdaq 1.29 per cent.

One major development last week was a sharp and sudden back up in Eurozone yields that suggested the long bull run in bonds might finally have run out of steam.

Tentative signs of an economic pick up in the region sent German 10-year Bund yields up nearly 21 basis points for the week, the biggest such move since June 2013.

Investors have also been tempted by a rush of longer-dated issuance from major corporates which offer better returns, leading them to pare back sovereign holdings.

The jump in bund yields had combined with a run of less than impressive U.S. economic data, to lift the euro to a nine-week peak of US$1.1289 on Friday. There it ran into profit taking and was hovering around US$1.1187 in Asia on Monday.

The US dollar fared better on the yen, rising to 120.16 yen but short of tough chart resistance at 120.84. Against a basket of currencies, the dollar was steady at 95.287.

The Australian dollar remained on the defensive at US$0.7829 amid intense speculation the Reserve Bank of Australia (RBA) will cut interest rates to a fresh record low of 2.0 per cent at a policy meeting on Tuesday.

In commodity markets, oil prices had eased off 2015 highs after Iraq said its crude exports hit a record in April, keeping Middle East production well above demand.

Brent crude was quoted 6 cents firmer at US$66.52 a barrel, while U.S. crude eased 3 cents to US$59.12.