GLOBAL MARKETS-U.S. stock futures, Chinese shares slip amid Sino-U.S. tensions, oil falters

* Chinese shares fall after reopening from long break
* Japanese markets closed for public holiday
* Oil ends multi-day winning streak

By Swati Pandey
SYDNEY, May 6 (Reuters) - Shares struggled and the yen
gained on Wednesday, with markets in China faltering on their
return from a long holiday as investors fretted over Sino-U.S.
tensions, while oil ended an extended winning streak on
oversupply risks amid weak demand.
Wall Street futures turned negative after starting higher,
with E-minis for the S&P500 ESc1 off 0.3%.
China, opening for the first time since Thursday, started on
the backfoot with the blue-chip index .CSI300 down 0.6%.
Australian shares .AXJO skidded 0.8%.
"There is a distinct risk-off tone to greet China coming
back from holiday," said Stephen Innes, chief global markets
strategist at AxiCorp.
"With Trump and the company still on the Wuhan Lab rampage,
traders are incredibly cautious this morning, weighing all the
possible China responses. And the one that would hurt the most
would be for China to reduce imports of U.S. oil."
Global financial markets have been caught this month between
grim economic figures and worries about worsening U.S.-China
relations, and optimism over easing COVID-19 lockdowns in many
countries.
U.S. President Donald Trump has repeatedly taken aim at
China as the source of the pandemic and warned that it would be
held to account.
On Tuesday, he urged China to be transparent about the
origins of the novel coronavirus that has killed more than a
quarter of a million people worldwide since it started in the
Chinese city of Wuhan late last year. Elsewhere, Hong Kong's Hang Seng index .HSI added 0.7%
while South Korea's KOSPI was also upbeat, rising 1%. Japanese
markets were closed for a public holiday.
That left MSCI's broadest index of Asia Pacific shares
outside of Japan .MIAPJ0000PUS up 0.3% in relatively light
volumes.
On Wall Street overnight, the S&P 500 pared earlier gains
after U.S. Federal Reserve Vice Chair Richard Clarida warned
that economic data would get much worse before getting better.
The index .SPX finished 0.90% higher, the Dow .DJI rose
0.6% and the Nasdaq Composite .IXIC added 1.1%.
In currencies, the yen scaled a three-year high against the
euro and a seven-week peak on the dollar on Wednesday, after a
court decision challenging German participation in Europe's
stimulus program and worries about a bumpy global recovery
spooked investors. FRX/
Germany's highest court on Tuesday gave the European Central
Bank three months to justify purchases under its bond-buying
programme, or lose the Bundesbank as a participant in a scheme
aimed at cushioning the economic blow from the coronavirus.

The euro EUR= hit a one-week low of $1.0826 overnight and
slumped to a three-year trough of 115.09 yen EURJPY= in Asia,
as traders fretted about both the scheme and the euro's future.
The safe-haven yen JPY= cracked through resistance against
the dollar to hit a seven-week high of 106.20. The Aussie
AUD=D3 and kiwi NZD=D3 slipped slightly on the greenback,
though held above 64 cents and 60 cents respectively. The pound
GBP= was steady at $1.2431.
The dollar index =USD was flat at 99.810.
Traders will keep an eye for the ADP National Employment
Report of private U.S. payrolls on Wednesday. It could foretell
the damage to be revealed on Friday in the official U.S.
government measure of jobs in April, estimated to show nearly 22
million jobs were lost last month.
In commodities, U.S. crude futures CLc1 slipped 6 cents to
$24.5 a barrel after five straight sessions of gains while Brent
crude LCOc1 was flat at $30.97. O/R
Oil prices had gained recently as European and Asian
countries had ended their lockdowns to halt the coronavirus
spread and as producers had axed supply after the demand crunch.
But analysts cautioned the rebalancing of the market would
be choppy.
"We're talking about normalisation of supply and demand but
we've got a long way to go," said Lachlan Shaw, National
Australia Bank's head of commodity strategy.
"There are a lot of supply cuts that have come through. That
combined with some early signs of demand lifting has meant the
rate of inventory build is slowing."
Spot gold XAU= eased 0.2% to $1,702 an ounce.

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