GLOBAL MARKETS-Asia shares look to China for recovery lead, earnings in focus

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Nikkei bounces, S&P 500 futures steady from pullback
* Bulls hope for positive news on corporate earnings
* Caution ahead of Biden inauguration, stimulus proposals

By Wayne Cole
SYDNEY, Jan 19 (Reuters) - Asian share markets edged ahead
on Tuesday as investors wagered China's economic strength would
help underpin growth in the region, even as pandemic lockdowns
threatened to lengthen the road to recovery in the West.
Data out on Monday had confirmed China's economy was one of
the few in the world to grow over 2020 and actually picked up
speed as the year closed. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS firmed 0.2%, to be a whisker from record highs.
Japan's Nikkei .N225 bounced 1%, recovering all the losses
suffered on Monday when caution had dominated markets.
U.S. stocks also looked a little steadier as futures for the
S&P 500 ESc1 added 0.4% and NASDAQ futures NQc1 0.3%.
Analysts at JPMorgan felt the coming earnings season could
brighten the mood given the consensus in Europe was for a fall
of 25% year-on-year, setting a very low bar.
"The projected EPS growth in Europe now stands at the lows
of the crisis which seems too conservative, and could likely
lead to positive surprises over the reporting season," they
wrote in a note.
The same could be true for the United States where results
this week include BofA, Morgan Stanley, Goldman Sachs and
Netflix.
For now, dealers were cautious ahead of U.S. President-elect
Joe Biden's inauguration given the risk of more mob violence,
along with doubts about how much of his fiscal stimulus package
will pass Republican opposition in Congress.
Janet Yellen, Biden's nominee to run the Treasury
Department, will tell the Senate Finance Committee on Tuesday
that the government must "act big" with the coronavirus relief
plan. "Biden will not want the risk of a double-dip recession to
escalate," said analysts at ANZ in a note.
The full $1.9 trillion proposal combined with stimulus
already agreed would amount to 10% of GDP.
"That would be sufficient to close any output gap and
underpin a gradual recovery in inflation as demand firms," they
wrote. "But it will be a difficult winter, and investors will
need renewed confidence in the inflation trade before
established earlier trends reassert themselves."
Wall Street is also bracing for tougher regulations now that
the Democrats control the Senate, with Biden set to nominating
two consumer champions to top financial agencies. In bond markets, 10-year Treasury yields US10YT=RR were
steady at 1.10% and off their recent 10-month high of 1.187% as
investors waited to see how much fiscal stimulus might actually
get passed.
Currencies were also quiet with the dollar index last at
90.770 =USD , comfortably above its recent trough of 89.206.
The euro idled at $1.2080 EUR= , after touching a six-week
low of $1.2052 overnight, while the dollar was sidelined on the
safe-haven yen at 103.70 JPY= .
The Canadian dollar eased to $1.2750 CAD= on reports Biden
would cancel a permit for the Keystone XL pipeline as one of his
first acts in office. Gold steadied at $1,836 an ounce XAU= after briefly
reaching a six-week low of $1,809.90 overnight. GOL/
Global demand concerns kept oil prices in check. U.S. crude
CLc1 added 1 cent to $52.37 a barrel, while Brent crude
LCOc1 futures had yet to trade. O/R

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(Editing by Lincoln Feast.)