GLOBAL MARKETS-Asian shares ease from three-week highs, dollar retreats

* MSCI ex-Japan reverses early gains, falls from 3-wk top
* Chinese, HK shares lower, CSI300 index off 1%
* Dollar softens to two-week lows
* Crude oil prices rise on economic recovery hopes

By Swati Pandey
SYDNEY, April 7 (Reuters) - Asian shares pulled back from a
three-week high on Wednesday, dragged lower by Chinese stocks,
though investors were still focused on upcoming company earnings
for more signs of a global economic recovery.
Eurostoxx 50 futures STXEc1 were off 0.1%, those for
Germany's Dax FDXc1 were barely changed while London's FTSE
futures FFIc1 were up 0.4%. E-Mini futures for the S&P 500
ESc1 were mostly flat.
Earlier, MSCI's broadest index of Asia-Pacific shares
outside of Japan .MIAPJ0000PUS had started on a firm footing,
going as high as 697.01 points, a level last seen on March 18.
However, it succumbed to selling pressure and was last down
0.1% after Chinese and Hong Kong shares opened in the red
following a strong rally last week.
China's bluechip CSI300 index .CSI300 was down about 1%
while Hong Kong's Hang Seng index .HSI fell 0.8%.
Geopolitical tensions in the region added to the jitters.
Taiwan's foreign minister said on Wednesday it will fight to
the end if China attacks, adding that the United States saw a
danger that this could happen amid mounting Chinese military
pressure, including aircraft carrier drills, near the island.

Other Asian markets were still positive.
Japan's Nikkei .N225 was a shade higher while Australian
shares .AXJO rose 0.6% and South Korea's KOSPI .KS11 added
0.3%. New Zealand ended 0.7% higher .NZ50 .
Broadly, successful vaccine rollouts in the United States
and UK together with sturdy macro-economic data have boosted
investors' risk appetite, aiding shares and emerging market
assets.
"The U.S. economy is experiencing the first effects of a
powerful double-dose vaccine of broad inoculation and fiscal
stimulus," said David Kelly, chief global market strategist at
J.P. Morgan Asset Management.
"The reality is that forecasts remain very uncertain...(but)
early signs show the recovery is accelerating, suggesting a
faster return to 'normal' than many had dared to hope a few
months ago," Kelly added.
Overnight, the three major Wall Street indexes closed lower,
a day after the S&P 500 and the Dow rose to record levels driven
by a stronger-than-expected jobs report last Friday and data
showing a dramatic rebound in the U.S. services industry on
Monday. .N
Investors also weighed the latest U.S. job openings report,
which showed that vacancies rose to a two-year high in February
while hiring had its biggest gain in nine months amid increased
COVID-19 vaccinations and additional government stimulus.
Moreover, the International Monetary Fund raised its global
growth forecast to 6% this year from 5.5%, reflecting a rapidly
brightening outlook for the U.S. economy. The upcoming earnings season is expected to show S&P profit
growth of 24.2% from a year earlier, according to Refinitiv
data, and investors will be watching to see whether corporate
results further confirm recent positive economic data.
Elsewhere, all eyes will be on minutes of the U.S. Federal
Reserve's policy meeting with a rally in U.S. Treasuries
extending into Wednesday. Ten-year yields US10YT=RR were down
at 1.6455% from as high as 1.776% on March 30.
The five-year U.S. Treasury yields dropped sharply to 0.874%
US5TY=TWEB , weighing on the U.S. dollar. FRX/
The five-year Treasury yield is seen as a major barometer of
how much faith investors have in the Federal Reserve's pledge
that it does not expect to raise interest rates until 2024.
The dollar =USD rebounded from a two-week low of 92.246
against a basket of world currencies.
The euro EUR= was flat at $1.1874, sterling was slightly
weaker at $1.3788 GBP= , while the Japanese yen JPY= was a
touch lower at 109.77.
In commodities, Brent crude futures LCOc1 was flat at
$63.74 a barrel while U.S. crude CLc1 was up 2 cents at
$59.35.
Spot gold XAU= was off a touch at $1,741.4 an ounce.

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