Asia shares off 7-month peak, mood turns cautious

SYDNEY (Reuters) – Asian shares briefly brushed up seven-month peaks on Monday as investors in the United States, but it's likely to be a tough sell-off in the U.S. earnings season.

In a document published on the central government's website late on Sunday, Beijing said it would be a step up to a policy of targeted cuts to banks' required reserve ratios to encourage financing for small and medium-sized businesses.

Chinese blue chips originally climbed to territory not visited since March last year, only to fade 1 percent as the session wore on. MSCI's broadest index of Asia-Pacific shares outside Japan.

Japan's Nikkei was off 0.1 percent after reaching its high of the year so far. E-Mini futures for the S & P 500 eased 0.2 percent and futures pointed to a soft start for the major European stock exchanges.

On Wall Street, the S & P 500 benchmark had last week, the longest winning streak since October 2017. [.N]

However, a test looms as major U.S. banks kick off what badysts expect to be the first quarter of contracting corporate earnings since 2016.

JPMorgan Chase & Co and Wells Fargo & Co will get the ball rolling on Friday.

Before that, minutes of the Federal Reserve's last policy meeting on Wednesday.

"Markets will be looking at just how the FOMC has become," wrote badysts at TD Securities in a note. "We have a very low but not zero luck we have cut cut discussion; The Fed officials are still talking about the Fed officials. "

"The minutes are likely to show peak dovishness in terms of nervousness about the outlook."

JOBS RELIEF

There was a huge sigh of relief globally on the United States, while annual income growth slowed down to 3.2 percent.

"This data badumes both the downside and the upside fears," said Alan Ruskin, head of G10 FX Strategy at Deutsche Bank. "Fears of soft growth are insured. It's not up to the inflation rate that would threaten inflation. "

"It plays to the idea that the US economy is fairly robust, and it is likely that it is going to buy U.S. dollar dips versus the majors."

The dollar drifted to 97.706 against a basket of currencies on Monday, shelling away from the March peak at 97.710 which marks major chart resistance.

The dollar surrendered some of its recent gains on the Japanese yen to 111.41, and again needs to clear the market.

The euro has been undermined by a string of dismal data from Europe and idled at $ 1.1226 from its recent 20-month trough at $ 1.1174.

Sterling had trouble of its own at $ 1.3063 on the European Union on April 12, with no deal agreed.

Prime Minister Theresa May is coming to a summit on Wednesday.

In commodity markets, the spot was sold at $ 1,296.52 per ounce.

Oil prices rose to their highest levels since Nov. 2018, driven by OPEC's ongoing supply cuts and U.S. sanctions against Iran and Venezuela. [O/R]

U.S. crude was last up 28 cents at $ 63.36 a barrel, while Brent crude futures rose 29 cents to $ 70.63.