GLOBAL MARKETS-Shares climb ahead of Yellen speech, earnings in focus

(Recasts, adds detail, updates prices)
* Global shares rise 0.3%, U.S dollar index dips
* Upbeat earnings reports support European shares
* Yellen to say U.S. must 'act big' on relief package
* Italian bond yields drop ahead of confidence vote
* 2021 asset performance http://tmsnrt.rs/2yaDPgn

By Danilo Masoni and Wayne Cole
MILAN/SYDNEY, Jan 19 (Reuters) - Global shares climbed and
the dollar eased on Tuesday ahead of Janet Yellen's Treasury
Secretary confirmation speech, in which she is expected to
bolster the case for heavy fiscal stimulus in the world's
largest economy.
Concerns that pandemic lockdowns could slow the road to
economic recovery faded into the background as markets prepared
for possible positive surprises from the earnings season.
Asian shares posted strong gains and in Europe upbeat
earnings reports from miner Rio Tinto and computer peripherals
maker Logitech helped the STOXX 600 benchmark index .STOXX
edge up by 0.1% in morning trade.
Wall Street looked set for a strong start, with S&P 500
futures ESc1 rising 0.6% and Nasdaq futures NQc1 up 0.9%
after the long holiday weekend.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.3% by 0907 GMT.
"Yellen ... will attempt to sell U.S. President-elect
Biden's $1.9 trillion fiscal stimulus plan (arguing that low
interest rates allow a big fiscal stimulus)," Paul Donovan,
Chief Economist of UBS Global Wealth Management, said in a note.
"If the growth rate generated by government investment in
infrastructure or people exceeds the cost of borrowing, it is a
worthwhile exercise."
Yellen will tell the Senate Finance Committee that the
government must "act big" with its next coronavirus relief
package, according to her prepared statement seen by Reuters.
Asian shares had climbed on investor expectation that
China's economic strength would help TO underpin growth in the
region. MSCI's broadest index of Asia-Pacific shares outside
Japan .MIAPJ0000PUS rose 1.5% to a record high. Data on Monday confirmed that the world's second-largest
economy was one of the few to grow over 2020 and actually
gathered pace as the year drew to a close. Analysts at JPMorgan felt the coming earnings season could
brighten the mood, given the consensus in Europe was for a 25%
fall year on year, setting a very low bar.
"The projected EPS (earnings per share) 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.
The same could be true for the United States, where results
from BofA, Morgan Stanley, Goldman Sachs and Netflix are due
this week.
Despite the risk-on mood on Tuesday, dealers were wary ahead
of U.S. President-elect Joe Biden's inauguration on Wednesday,
given the risk of more mob violence.
Wall Street is also bracing for tougher regulations now that
the Democrats control the Senate, with Biden set to nominate two
consumer champions to top financial agencies. In foreign exchange markets, the U.S. dollar slipped from
close to its highest in nearly a month as caution set in before
Yellen's speech.
The dollar index was last at 90.63 =USD , down 0.15% on the
day but comfortably above its recent trough of 89.206.
The euro rose 0.2% to $1.2106 EUR= after touching a
six-week low of $1.2052 overnight, while the dollar weakened by
0.3% against the safe-haven yen at 104.04 JPY= .
In fixed income markets, Italian 10-year bond yields
IT10YT=RR fell slightly to 0.592% ahead of a confidence vote
in the Senate that could force Prime minister Giuseppe Conte to
resign.
But expectations that snap elections are unlikely, coupled
with ECB stimulus to fight the adverse impact of the coronavirus
crisis, limited any sell-off.
Gold rose 0.3% to $1,843 an ounce XAU= after briefly
reaching a six-week low of $1,809.90 overnight. GOL/
Crude oil prices firmed on optimism that government stimulus
will buoy global economic growth and oil demand. Brent crude
LCOc1 futures rose 0.7% to $55.40 a barrel and U.S. crude
CLc1 was up 0.5% at $52.60. O/R