GLOBAL MARKETS-Shares climb, dollar dips before Yellen speech; earnings in focus

(Adds detail, updates prices)
* World shares rise 0.4%, oil up 1%, U.S. dollar falls
* U.S. stock index futures point to strong start
* 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
MILAN, Jan 19 (Reuters) - Global shares climbed and the
dollar eased on Tuesday before 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.
Concern that pandemic lockdowns could slow the road to
economic recovery faded as markets prepared for possible
positive surprises from the earnings season.
Asian shares posted strong gains and in Europe upbeat
earnings reports, including from computer peripherals maker
Logitech, helped the STOXX 600 index .STOXX edge up by 0.1%,
offsetting a possible extension of lockdowns in Germany.
Wall Street looked set for a strong start, with S&P 500
futures ESc1 rising 0.7% and Nasdaq futures NQc1 up 0.8%
after the long holiday weekend.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.4% by 1231 GMT.
"Yellen ... will attempt to sell U.S. President-elect (Joe)
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. Bank of
America shares rose in pre-market trade after results while
investors were awaiting for results from Goldman Sachs and
Netflix later on Tuesday. Morgan Stanley, IBM and Intel are
slated later this week.
Despite the risk-on mood on Tuesday, some dealers were wary
before President-elect Biden's inauguration on Wednesday,
fearing 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, where she is expected to reaffirm commitment to
a market-determined exchange rate.
The dollar index =USD fell 0.3% to 90.48 but remained
comfortably above its recent trough of 89.206.
The euro EUR=D3 rose 0.5% to $1.212 after touching a
six-week low of $1.2052 in the previous session. The dollar
weakened by 0.3% against the safe-haven yen at 103.9 JPY= .
In fixed-income markets, Italian 10-year bond yields
IT10YT=RR fell to 0.584% before a confidence vote in the
Senate that could force Prime Minister Giuseppe Conte to resign.
But expectations that snap elections are unlikely, coupled
with European Central Bank stimulus to fight the adverse impact
of the coronavirus crisis, limited any sell-off.
Gold XAU= rose 0.1% to $1,838.3 an ounce, recovering from
a six-week low of $1,809.90 briefly hit on Monday. GOL/
Optimism that government stimulus will buoy global economic
growth and oil demand lifted crude oil prices. Brent crude
LCOc1 futures rose 1.1% to $55.36 a barrel and U.S. crude
CLc1 was up 0.3% at $52.5. O/R