GLOBAL MARKETS-Jitters hit stocks before Fed and earnings

© Reuters.

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Treasury yield curve in focus before auction and Fed
* Oil rebounds but further downside risks seen

By Stanley White
TOKYO, April 27 (Reuters) - Asian shares were little changed
on Tuesday, as caution ahead of the U.S. Federal Reserve's
meeting and corporate earnings offset optimism about the global
recovery from the COVID-19 pandemic.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.01%. Australian stocks .AXJO dropped
0.19%, and shares in China .CSI300 fell 0.08%. Stocks in Tokyo
.N225 edged 0.23% lower.
S&P 500 e-mini stock futures EScv1 rose 0.2%.
The pan-region Euro Stoxx 50 futures STXEc1 were down
0.05%, German DAX futures FDXc1 were down 0.08%, and FTSE
futures FFIc1 were down 0.07%, pointing to a soft start to the
European session.
Oil rebounded after major oil producers stood by their
demand forecasts, but there are still downside risks due to
surging COVID-19 cases in India, the world's third-biggest oil
importer.
Analysts said some investors may be taking profits on
equities, but sentiment remains positive due to rising
coronavirus vaccination rates in many countries.
"There are two reasons to remain positive on equities and
commodities," said Masayuki Kichikawa, chief macro strategist at
Sumitomo Mitsui Asset Management Co in Tokyo.
"The global economy is likely to continue to strengthen and
many advanced economies are heading for a reopening due to
progress in vaccinations."
However, despite the hopeful signs, a bullish session on
Wall Street failed to inspire Asian markets. The S&P 500 .SPX
and Nasdaq .IXIC closed at record highs on Monday, fuelled by
heavyweight growth stocks ahead of a deluge of earnings reports
this week. The Dow Jones Industrial Average .DJI ended 0.18%
lower.
In extended trade, Tesla TSLA.O dipped about 0.4% even
after the electric car maker beat Wall Street expectations for
first-quarter revenue. Sentiment for equities in many markets has improved steadily
this month due to expectations that rising vaccination rates
will allow more economies to resume normal activity.
However, one area of concern is India, which is struggling
with a surge of coronavirus infections that has overwhelmed its
healthcare system. Many investors stuck to the sidelines ahead of the Fed's
policy meeting ending on Wednesday, where the U.S. central bank
is expected to confirm that it will maintain its easy monetary
policy to bolster the economy.
Bond traders are also closely watching an auction of
$62-billion of seven-year U.S. Treasuries later on Tuesday.
The Treasury saw very weak demand at a seven-year debt
auction in February, which sparked a brutal market selloff
across the globe. The notes also saw tepid, although improved,
demand in March.
Ahead of the auction results, seven-year yields US7YT=RR
edged up to 1.2689%, while benchmark 10-year yields US10YT=RR
rose slightly to 1.5774%.
The dollar =USD was hemmed into a narrow range as traders
avoided taking out big positions before the bond auction and Fed
meeting.
The yen JPY= pulled back from a seven-week high against
the dollar after the Bank of Japan lowered its consumer price
forecasts only a week after Tokyo and Osaka entered their third
state of emergency over a spike in coronavirus infections.
U.S. crude CLc1 ticked up 0.74% to $62.37 a barrel, and
Brent crude LCOc1 rose 0.72% to $66.12 per barrel, but the
bounce in oil could be limited due to worries about the return
of travel restriction in response to India's coronavirus surge.
Bitcoin BTC=BTSP was little changed at $53,918. The
world's most popular cryptocurrency soared nearly 10% on Monday,
after five straight days of losses, on reports that JPMorgan
Chase JPM.N is planning to offer a managed Bitcoin fund.
Bitcoin had slumped almost a fifth from its all-time high
hit earlier this month.
Rival digital asset Ether ETH=BTSP was steady at $2,528.

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