GLOBAL MARKETS-Asian shares climb, U.S. earnings to test dogged optimism

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asia-ex Japan share index near five-month top
* Markets brace for U.S. earnings season
* Investors upbeat even as coronavirus cases surge in U.S.

By Wayne Cole
SYDNEY, July 13 (Reuters) - Asian shares climbed toward
five-month peaks on Monday as investors wagered the U.S.
earnings season would see most companies beat forecasts given
expectations had been lowered so far by coronavirus lockdowns.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS added 1%, having climbed sharply last week on
the back of surging Chinese stocks, which jumped another 2% on
Monday. .CSI300 .
Japan's Nikkei .N225 gained 2% and South Korea .KS11
1.6%. E-Mini futures for the S&P 500 ESc1 rose 0.5% even as
some U.S. states reported record new cases of COVID-19, a
divergence that shows no sign of stopping.
EUROSTOXX 50 futures STXEc1 added 1.1% and FTSE futures
FFIc1 1%.
"Ongoing grim U.S. COVID-19 infection news continues to be
summarily ignored in favour of ongoing optimism regarding the
time-line for the discovery and rapid roll-out of an effective
vaccine and/or more policy support for asset prices and the U.S.
economy," said Ray Attrill, head of FX strategy at NAB.
"JP Morgan, Citigroup, and Wells Fargo all report on Tuesday
and there's a view that the bar has been set pretty low for them
to report the almost obligatory 'better than expected' results -
the absence of forward guidance from many firms
notwithstanding."
Wednesday sees Goldman Sachs and Bank of New York report,
while Thursday has Netflix and Morgan Stanley.
While bank shares rose sharply on Friday they have been
badly lagging technology stocks, with analysts at Bank of
America noting tech outperformance in the past six months was
greatest since the 1999 tech bubble and the 2008 global
financial crisis.
If the S&P 500 .SPX was just "tech, health care, Amazon,
Google" the index would now be 4,173, they wrote in a note, way
above the current level of 3,185. If made up of everything else,
it would be 2,924.
"Central banks are crushing rate expectations, forcing
risk-taking in credit markets," they added.
Yields on U.S. 10-year notes US10YT=RR came close to
record lows last week at 0.569% and were last at 0.63%.
Super-low rates have in turn been a boon for non-yielding
gold which hit a near nine-year high after five straight weeks
of gains. The metal was last at $1,805 an ounce XAU= , just off
a $1,817.17 top.
The hunt for yield has tended to benefit emerging market
currencies and those leveraged to commodities such as the
Australian dollar, while weighing on the U.S. dollar.
Against a basket of currencies, the dollar was off at 96.441
=USD on Monday and not far from the June trough of 95.714. The
dollar was a fraction softer on the yen at 106.88 JPY= , while
the euro held at $1.1329 EUR= .
Oil prices eased in early trade, although that followed a
sharp rise on Friday when the International Energy Agency (IEA)
bumped up its 2020 demand forecast. O/R
Brent crude LCOc1 futures dipped 29 cents to $42.95 a
barrel, while U.S. crude CLc1 lost 30 cents to $40.25.

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(Editing by Richard Pullin and Jacqueline Wong)