(Corrects day of week in first paragraph to Tuesday from
Monday)
* MSCI Asia ex-Japan +0.25%; Nikkei -0.69%
* European shares seen mainly weaker at the open
* 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) - Most Asian stock markets rose
on Tuesday, but gains were limited as investors awaited U.S.
retail sales data and corporate earnings to gauge the health of
the world's biggest economy ahead of a likely U.S. rate cut
later this month.
European markets looked set for an equally cautious session,
with pan-region Euro Stoxx 50 futures STXEc1 down 0.14% in
early trade.
German DAX futures FDXc1 were up 0.04%, FTSE futures
FFIc1 were down 0.18%, and financial spreadbetters saw
France's CAC 40 .FCHI opening flat.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was last up 0.3%, with losses in Chinese shares
capping gains elsewhere in the region.
China's blue-chip CSI300 index .CSI300 fell 0.3% as
investors fretted over slower growth in the world's
second-largest economy and the impact of the Sino-U.S. trade
war, even as new data highlighted Beijing's efforts to boost
spending. .SS
South Korea's KOSPI .KS11 added 0.4% after a slow start,
and shares in Taiwan .TWII rose 0.1%.
The Australian market .AXJO shed 0.1%, unmoved by the
release of dovish minutes from the Reserve Bank of Australia's
July meeting.
Japan's Nikkei stock index .N225 ended down nearly 0.7%.
.T
Encouraging Chinese June data on Monday had provided some
relief to investors worried about the economic outlook, but
pressure on global business and investment from the trade war
and slowing world growth are reinforcing expectations of policy
easing by major central banks. "A U.S. rate cut should make it easier for central banks in
Asia to ease their policies, boosting domestic demand in the
region," said Yukino Yamada, senior strategist at Daiwa
Securities.
"We still don't know what to expect from the U.S.-China
trade war ... But there are vague expectations that Trump will
be quiet during summer and the issue will be put on the back
burner until near China's National Day (in early October)," she
said.
Overnight, U.S. President Donald Trump showed no signs of
softening his stance on China, warning that Washington could
pile on more pressure as trade talks sputtered along.
U.S. data on Tuesday is expected to show that retail sales
rose 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 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 have fully priced in a 25-basis point cut by the Fed
at its meeting at the end of this month.
The quiet Asian trading session followed an equally subdued
day on Wall Street, 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%.
SLIGHT FLATTENING
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.
That reversed slightly on Tuesday, with the yield on
benchmark 10-year Treasury notes US10YT=RR turning higher to
2.0973% 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, gained faster, rising
to 1.8416% compared with a U.S. close of 1.833%.
In the currency market, the dollar was up 0.09% against the
yen at 108.00 JPY= , and the euro EUR= ticked up 0.04%,
buying $1.1261.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was a touch stronger at 96.962.
Oil prices steadied after earlier easing on signs that the
impact of a tropical storm on U.S. Gulf Coast production would
be short-lived. O/R
Global benchmark Brent crude LCOc1 was flat at $66.48 per
barrel, and U.S. West Texas Intermediate (WTI) crude CLc1
dipped 0.12% to $59.51 per barrel.
Trade in gold echoed the cautious tone of equity markets
ahead of U.S. data. The precious metal was last down 0.03% on
the spot market XAU= at $1,413.20 per ounce. GOL/
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U.S. Treasury Curve steepening https://tmsnrt.rs/2k0uGp5
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