GLOBAL MARKETS-Asian shares tick up, U.S. data, earnings in focus ahead of Fed

* MSCI Asia ex-Japan +0.04%
* U.S. retail sales data in focus
* Citigroup interest margin decline highlights headwinds for
banks
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Andrew Galbraith
SHANGHAI, July 16 (Reuters) - Asian shares inched up on
Tuesday as traders awaited U.S. retail sales data and more
corporate earnings to gauge the health of the world's biggest
economy, with markets remaining focused on a likely U.S. rate
cut by the end of the month.
Investors were relieved by encouraging Chinese economic data
on the previous day, though broad pressure across global
business and investment from Sino-U.S. trade frictions and
slowing world growth reinforced expectations of policy easing by
major central banks. U.S. data on Tuesday is expected to show that retail sales
gained 0.1% in June, according to the median estimate of
economists polled by Reuters. But a decline in net interest
margin reported by Citigroup C.N in its mixed quarterly report
underlined risks for financial firms in a lower interest rate
environment.
That decline partly overshadowed better-than-expected profit
numbers, triggering a fall in shares of other banks on concerns
that it would presage lower profits across the industry.

"Clearly the biggest risk to the most recent rally is the
earnings season," said Ryan Felsman, senior economist at CommSec
in Sydney.
Signs of trade tensions weighing on corporate profits and
the fading impact of tax cuts would underscore the U.S. Federal
Reserve's concerns over slowing business investment, he said.
"That feeds into the narrative of concerns around the global
economy, the slowing in the U.S. economy, but also the need for
potentially more aggressive rate cuts from the Fed to support
the U.S. economy going forward," Felsman said.
Markets are fully priced for a 25-basis point cut by the Fed
at its meeting at the end of this month.
Early in the Asian trading day, MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.04%.
That followed small gains on Wall Street overnight, with the
Dow Jones Industrial Average .DJI rising 0.1%, the S&P 500
.SPX gaining 0.02% and the Nasdaq Composite .IXIC adding
0.17%.
U.S. S&P 500 e-mini stock futures pointed up ESc1 , rising
0.07% in early Asian trade.
Australian shares .AXJO were up 0.1% and Japan's Nikkei
stock index .N225 dipped 0.36%.
Ahead of the release of U.S. retail sales figures, signs of
an improving economic situation in the United States have led to
a steepening of the U.S. yield curve, led by higher longer-dated
yields.
On Tuesday, the yield on benchmark 10-year Treasury notes
US10YT=RR turned down slightly to 2.087% compared with its
U.S. close of 2.092% on Monday.
The two-year yield US2YT=RR , closely watched as a gauge of
traders' expectations for Fed fund rates, extended its falls to
1.829% compared with a U.S. close of 1.833%.
In the currency market, the dollar was up 0.12% against the
yen at 108.03 JPY= , and the euro EUR= was flat, buying
$1.1255.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was largely unchanged at 96.957.
Oil prices, which had risen amid concerns over the impact of
a tropical storm on U.S. Gulf Coast production, eased on signs
any impact would be short lived, and as slowing Chinese growth
drove a reassessment of the outlook for crude demand.
U.S. West Texas Intermediate (WTI) crude CLc1 , fell 0.18%
to $59.36 a barrel and Brent crude LCOc1 , the global
benchmark, dipped to $66.36 per barrel.
Gold was slightly higher, with spot gold XAU= trading at
$1,414.32 per ounce. GOL/