GLOBAL MARKETS-Asia shares step back, await China economic update

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Nikkei off 1%, trade thinned by U.S. holiday
* Eyes on China GDP data for economic outlook
* US dollar, Treasuries hold gains as risk appetite sours

By Wayne Cole
SYDNEY, Jan 18 (Reuters) - Asian share markets retreated
from highs on Monday as disappointing news on U.S. consumer
spending tempered risk sentiment ahead of a closely-watched
reading on the health of the Chinese economy.
Also evident were doubts about how much of U.S.
President-elect Joe Biden's stimulus package will make it
through Congress given Republican opposition, and the risk of
more mob violence at his inauguration on Wednesday.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lost 0.3% having hit a string of record peaks in
recent weeks. Japan's Nikkei .N225 slipped 1% and away from a
30-year high.
E-Mini futures for the S&P 500 ESc1 dipped 0.3%, though
Wall Street will be closed on Monday for a holiday.
Chinese GDP data are expected to show growth picked up to an
annual 6.1% last quarter, from 4.9% in the third quarter.
Monthly figures on retail sales and industrial output should
show brisk activity as the year ended.
"We expect Q4 Chinese GDP growth accelerated to an
above-consensus 6.5% a year because of robust industrial output,
the recovery in services and strong exports," said Joseph
Capurso, head of international economics at CBA.
"The data will confirm the Chinese economy ended the year on
a strong footing."
That would be a marked contrast to the U.S. and Europe where
the spread of coronavirus has scarred consumer spending,
underlined by dismal U.S. retail sales reported on Friday.
"The data bring into question the durability of the recent
move higher in bond yields and the rise in inflation
compensation," said analysts at ANZ in a note.
"There's a lot of good news around vaccines and stimulus
priced into equities, but optimism is being challenged by the
reality of the tough few months ahead," they warned. "The risk
across Europe is that lockdowns will be extended, and U.S. cases
could lift sharply as the UK COVID variant spreads."
That will put the focus on earnings guidance from corporate
results this week, which include BofA, Morgan Stanley, Goldman
Sachs and Netflix.
The poor U.S. data helped Treasuries pare some of their
recent steep losses and 10-year yields US10YT=RR were trading
at 1.087%, down from last week's top of 1.187%.
The more sober mood in turn boosted the safe-haven U.S.
dollar, catching a bearish market deeply short. Speculators
increased their net short dollar position to the largest since
May 2011 in the week ended Jan. 12. The dollar index duly rallied to 90.837 =USD , and away
from its recent 2-1/2 year trough at 89.206.
The euro had retreated to $1.2068 EUR= , from its January
peak at $1.2349, while the dollar held steady on the yen at
103.93 JPY= and well above the recent low at 102.57.
Biden's pick for Treasury Secretary, Janet Yellen, is
expected to rule out seeking a weaker dollar when testifying on
Capital Hill on Tuesday, the Wall Street Journal reported.
Gold prices were undermined by the bounce in the dollar
leaving the metal down at $1,812 an ounce XAU= , compared to
its January top of $1,959.
Oil prices ran into profit-taking on worries the spread of
increasingly tight lockdowns globally would hurt demand. O/R
Brent crude LCOc1 futures were off 12 cents at $54.98 a
barrel, while U.S. crude CLc1 eased 11 cents to $52.25.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Shri Navaratnam)