GLOBAL MARKETS-Record high stocks pause to gauge Sino-US trade outlook, company earnings

* European shares open lower
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Tariffs to stay until there is 'Phase 2' agreement:
Mnuchin
* U.S.-China 'Phase 1' trade deal to be signed later on
Wednesday
* Bond yields inch lower; US earnings in focus

(Updates throughout, changes byline, dateline)
By Sujata Rao
TOKYO, Jan 15 (Reuters) - World stocks eased off record
highs on Wednesday and U.S. and German bond yields slipped as
euphoria over a Sino-U.S. trade deal was depleted by U.S.
Treasury Secretary Steven Mnuchin saying tariffs on Chinese
goods would remain in place for now.
The 18-month long trade spat should enter a quieter phase as
U.S. President Donald Trump and Chinese Vice Premier Liu He sign
an initial agreement that would boost Chinese purchases of U.S.
manufactured and agricultural goods, energy and services.
Dubbed the Phase 1 deal, it may soothe markets which have
been on edge as the conflict between the world's two largest
economies hit hundreds of billions of dollars in goods, uprooted
supply chains and slowed economic growth.
But share prices have pulled back from recent highs, with
Wall Street closing weaker on Tuesday, MSCI's index of Asian
shares outside Japan .MIAPJ0000PUS retreating from 19-month
peaks and Japan's benchmark Nikkei .N225 likewise falling
0.5%, off a four-week high.
Bourses in China, South Korea and Hong Kong lost between
0.5%-0.7% on the day .SSEC .KS11 .HSI .
The pan-European STOXX 600 index .STOXX slipped 0.1%.
The retreat was triggered by Mnuchin's comments that U.S.
tariffs on Chinese goods would stay until the completion of a
second phase of a U.S.-China trade agreement. Their eventual
removal hinged on Beijing's compliance with the Phase 1 accord,
Bloomberg reported, citing sources. The news did not entirely surprise markets, however, and
many attributed the pullback to profit-taking off the recent
rally than to any turn in underlying sentiment.
"The Phase One deal had pretty much been priced in so
(Mnuchin's) comments took some steam out of the market last
night and that's feeding through into today," said Justin
Onuekwusi, a portfolio manager at Legal & General Investment
Management.
The jittery mood gave a mild boost to safe-haven assets such
as gold, with the precious metal ticking up 0.3% after two days
of losses XAU= . The Japanese yen and high-grade bonds also
firmed slightly, though the yen was only 0.1% higher versus the
dollar and a whisker off 7-1/2-month lows of 110.22 JPY=D3 .
U.S. Treasury yields ticked down, with the benchmark 10-year
note yield falling more than 2 basis points to 1.7930%
US10YT=RR , hurt also by Tuesday's data showing consumer prices
undershooting expectations in December, which could allow
interest rates to stay unchanged this year.
German 10-year yields also eased 2 bps, having earlier hit
two-week highs around minus 0.169% DE10YT=RR but their
direction may hinge on 2019 German growth numbers which showed
the biggest euro zone economy grew at its slowest since 2013.
Markets are also weighing the potential impact of the U.S.
government nearing publication of a rule to vastly expand its
powers to block shipments of foreign-made goods to China's
Huawei, as it seeks to squeeze the blacklisted telecoms firm.
"I think the Trump administration will continue to put
pressure on China in this way or some other, even after signing
a Phase 1 deal," Yuichi Kodama, chief economist at Meiji Yasuda
Life Insurance said.
Markets are also likely to focus more on company earnings
from now -- Refinitiv analysis suggests S&P 500 companies had a
dismal fourth quarter, with earnings-per-share falling 0.6% --
the second straight quarterly decline.
Big banks Goldman Sachs, Bank of America, BlackRock are
among those reporting results later on Wednesday and
expectations are high after JPMorgan posted record profits and
Citi beat estimates, though Wells Fargo profits slumped.

"The market will see trade escalation taken off the table
but it will start to focus on earnings. We saw huge multiple
expansions in 2019 and that won't happen again until we see
earnings coming through," Onuekwusi said.
On currency markets, the trade-reliant Australian dollar
slipped 0.3% against the greenback while the euro was broadly
flat AUD=D3 EUR=EBS .
The offshore yuan CNH= weakened slightly, a day after
rising to its strongest level in six months of 6.865.
Investors were focused on the British pound which is down
almost 2% this month versus the dollar GBP=D3 as dismal
economic numbers and policymaker comments have fanned
expectations of an interest rate cut as soon as this month. A
quarter-point cut is now fully priced by end-2020 https://tmsnrt.rs/2NmDt00>