(Corrects headline to remove extraneous words)
* Asian shares set for third straight week of gains
* Taiwan leads Asian gains; U.S. European share futures up
* Treasury yield curve remains sharply inverted
* Oil edges off near six month lows
HONG KONG, Aug 5 (Reuters) - Asian shares gained on Friday
ahead of U.S. jobs data that will give another clue to the
health of the world's largest economy as warning signs flashed
in bond markets, and oil traded around its lowest level since
the start of the war in Ukraine.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.74%, boosted by index heavyweight TSMC
, which jumped 3.2%, regaining ground it had lost
earlier in the week due to tensions surrounding U.S. House of
Representatives Speaker Nancy Pelosi's visit to Taiwan.
This left the regional index set to finish a third straight
week in positive territory, while Japan's Nikkei gained
EUROSTOXX 50 futures and S&P 500 futures both
But the day's main event, U.S. employment data, is yet to
come, with investors waiting to see whether the U.S. Federal
Reserve's aggressive pace of rate hikes is starting to cause
economic growth to slow.
Nonfarm payrolls are expected to increase by 250,000 jobs
last month, after rising by 372,000 jobs in June.
Last week, shares and U.S. treasuries rose as markets
decided the Fed might raise rates less aggressively due to fears
about a recession and hopes of slowing inflation, though many
Fed policy makers have pushed back on such suggestions this
"We're waiting to see a slowdown in the labour market, so if
we get a large miss, it will finally confirm the labour market
is slowing, and we'll see some more rallies in U.S. treasuries,"
said Prashant Bhayani, chief investment officer for Asia at BNP
Paribas Wealth Management.
Other asset classes are already reflecting a slowdown.
"The bond market is saying there is a pretty high chance of
recession, while the equity market is focused on the labour
data, said Bhayani.
The closely watched part of the U.S. Treasury yield curve
measuring the gap between yields on two- and 10-year Treasury
notes reached 39.2 basis points overnight, the
deepest inversion since 2000.
An inverted curve is often viewed as portending a recession.
On Friday morning, 10-year yield was 2.6936% and
the two-year yield was 3.0531%, leaving the gap
between them at a still large 36 basis points.
In another sign that growth could be slowing, oil closed
overnight at its lowest levels since February, before the war in
"Crude oil fell sharply as recessionary fears drove concerns
of weaker demand," said analysts at ANZ, with declines also
partly due to data on Wednesday showing surge in U.S.
inventories last week.
Prices recovered a touch in Asia trade on Friday, Benchmark
Brent crude futures were up 0.5% $94.61 a barrel and
U.S. crude futures were 0.7% higher at $89.12 a barrel.
In currency markets the dollar index, which measures
the greenback against six major peers, was at 105.93, up a
fraction having fallen 0.6% overnight alongside falling U.S.
Sterling was down a whisker against the dollar at
$1.2142 after taking a spin overnight as the Bank of England
raised interested rates and warned a long recession was
Spot gold was steady at $1,790 an ounce.
(Editing by Stephen Coates)