* MSCI ex-Japan returns early gains, falls from 3-week top
* Chinese, HK shares lower, CSI300 index of 1%
* Dollar softens to two-week lows
* Crude oil prices rise in hopes of economic recovery
SYDNEY, April 7 (Reuters) – Asian equities retreated from a three-week high on Wednesday, with Chinese equities dragging lower, while investors remained focused on upcoming corporate earnings for more signs of a global economic recovery.
Eurostoxx 50 futures fell 0.1%, those for the Dax’s Dax barely changed while London’s FTSE futures rose 0.4%. E-Mini futures contracts for the S&P 500 were mostly smooth.
Earlier, MSCI’s broadest index of Asia-Pacific stocks outside Japan started on a solid basis, rising to 697.01 points, a level last seen on March 18.
However, it fell under pressure from the sale and was last 0.1% lower after Chinese and Hong Kong shares opened in the red after a strong rally last week.
Bluechip’s Chinese CSI300 index fell by about 1%, while Hong Kong’s Hang Seng index fell by 0.8%.
Geopolitical tensions in the region contributed to the unrest.
Taiwan’s foreign minister said on Wednesday that he would fight to the end if China attacked, adding that the United States saw a danger that this could happen amid increasing Chinese military pressure, including aircraft carrier exercises, near the island.
Other Asian markets remained positive.
The Japanese Nikkei was slightly higher, while Australian equities rose 0.6% and South Korea’s KOSPI 0.3%. New Zealand finished 0.7% higher.
In general, successful vaccination of vaccines in the United States and the United Kingdom, coupled with solid macroeconomic data, boosted investors’ risk appetite, supported equities and emerging market assets.
“The U.S. economy is experiencing the first effects of a powerful dual-dose vaccine with broad-spectrum and fiscal stimulus,” said David Kelly, chief global strategist at JP Morgan Asset Management.
“The reality is that forecasts remain very uncertain … (but) early signs show that recovery is accelerating, indicating a faster return to ‘normal’ than many people dared to do a few months ago. hope, ‘Kelly added.
The three major Wall Street indices closed lower overnight, a day after the S&P 500 and the Dow rose to record levels last Friday, driven by a stronger-than-expected job report and data showing a dramatic upswing in the U.S. service industry on Monday .
Investors also weighed in on the latest U.S. employment report, which showed vacancies rose to a two-year high in February, while rents saw the biggest gains in nine months amid increased COVID-19 vaccinations and additional stimuli from the government.
Furthermore, the International Monetary Fund has raised its global growth forecast to 6% this year from 5.5%, reflecting a rapidly brightening outlook for the US economy.
According to Refinitiv, the upcoming earnings season will show S&P profit growth of 24.2% over a year earlier, and investors will see if the company’s results further confirm the recent positive economic data.
Elsewhere, all eyes will be on the minutes of the US Federal Reserve’s policy meeting with a meeting in the US Treasury until Wednesday. Ten-year yields declined at 1.6455% from as high as 1.776% on March 30th.
The five-year US yield fell sharply to 0.874%, weighed on the US dollar.
The five-year treasury yield is seen as an important barometer of how much confidence investors have in the Federal Reserve’s promise that it will not raise interest rates until 2024.
The dollar bounced back from a two-week low of 92,246 against a basket of world currencies.
The euro was low at $ 1.1874, the sterling was slightly weaker at $ 1.3788, while the Japanese yen was slightly lower at 109.77.
In commodities, Brent’s crude futures were down $ 63.74 a barrel, while U.S. crude rose 2 cents to $ 59.35.
Spot gold was $ 1,741.4 per ounce.
Reporting by Chibuike Oguh in New York and Swati Pandey in Sydney; Edited by Christopher Cushing, Ana Nicolaci da Costa and Kim Coghill