GLOBAL MARKETS-World shares subdued amid mixed earnings; oil falters

* Earnings weigh in Europe
* Chinese shares reverse losses on CNY fixing
* Oil ends multi-day winning streak
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

By Tom Arnold
LONDON, May 6 (Reuters) - Global shares struggled on
Wednesday as mixed earnings, doubts about the easing of
coronavirus lockdowns and simmering U.S.-China tensions cast a
pall over markets.
Oil prices ended an extended winning streak on oversupply
risks.
MSCI's index of global shares .MIWD00000PUS was trading
flat. The pan-European STOXX 600 .STOXX was 0.3% higher, with
losses in oil and gas shares weighing on the index. Shares in
UniCredit < CRDI.MI> fell about 1% after Italy's biggest bank
posted a 2.7 billion-euro loss in the first quarter amid loan
writedowns in anticipation of the damage caused by the pandemic.
"Earnings season is not great, but it's really the issue of
the virus and the end of the lockdown, and sentiment towards
that will push the market," said Francois Savary, chief
investment officer at Swiss wealth manager Prime Partners.
"We think there'll be a consolidation for the equity market.
It won't take us back to the lows we saw in March, but markets
are waiting for a clearer outlook on how the lockdown will end."
Germany and Spain are among economies gradually emerging
from lockdowns, but the outlook for an easing of restrictions
elsewhere is less certain.
Wall Street futures were positive, with E-minis for the
S&P500 ESc1 up 0.6%.
MSCI's broadest index of Asia Pacific shares outside of
Japan .MIAPJ0000PUS climbed 0.7%. Volumes were light with
Japanese markets closed for a holiday.
China, opening for the first time since Thursday, reversed
early losses, sending the blue-chip index .CSI300 up 0.6%.
In a move that was seen by analysts as offering a olive
branch to Washington amid the trade tensions, China's central
bank set the yuan CNY= at a broadly neutral midpoint. The
exchange rate has been a contentious point in Sino-U.S. ties.
"The People's Bank of China went a long way to extinguishing
one major trade war hotspot by setting the yuan reference rate
on a more risk-friendly level," said Stephen Innes, chief
markets strategist at AxiCorp.
"USD/CNH dropped about 200 pips on the stable fix, and a
recovery in risk sentiment ensued, and there was no
follow-through on U.S. President Trump's threat to China."
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 coronavirus, which began in the Chinese city of Wuhan late
last year. 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 worse before it got better.
FALL
In currencies, the euro resumed its fall, declining to a
six-day low of $1.0816 on Wednesday EUR=EBS . The currency was
still under pressure after Germany's top court on Tuesday ruled
that the European Central Bank's quantitative-easing programme
"partially violated" the German constitution. The yen rose 0.2% to 106.35, having earlier reached 106.20,
its strongest since March 17 JPY=EBS . The dollar index =USD
was flat at 99.810.
The ADP National Employment Report of private U.S. payrolls
on Wednesday could foretell the damage to be revealed on Friday
in the U.S. government's measure of jobs in April. It's expected
to show nearly 22 million jobs were lost last month.
German borrowing costs rose before the country's first
syndicated bond sale in half a decade. Germany's benchmark
10-year yields rose two basis points to -0.55%, though they
remain close to Tuesday's seven-week lows DE10YT=RR .
In commodities, U.S. crude futures CLc1 fell 22 cents to
$24.34 a barrel after five straight sessions of gains. Brent
crude LCOc1 dropped 25 cents $30.72. O/R
The decline was prompted by a higher-than-expected rise in
U.S. inventories, refocusing investors on the risk of oversupply
amid a slump in fuel demand. 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 0.1% to $1,704 an ounce.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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