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GLOBAL MARKETS-Asian shares drift lower in choppy markets

By Alun John

HONG KONG, July 19 (Reuters) - Asian shares slipped on Tuesday, following overnight declines on Wall Street, and the dollar hovered below last week's peak, but traders' main focus was approaching central bank meetings and the early stages of the U.S. earnings season.

MSCI's broadest index of Asia-Pacific shares outside Japan , fell 0.46%, walking back some of the previous day's 1.8% gain, and heading back towards last week's two-year low.

Asian tech stocks like Alibaba Samsung , and Nintendo helped lead the declines, after U.S. equity markets had closed lower overnight, impacted by reports Apple plans to slow hiring and spending growth next year.

Still, in a sign markets were struggling to find a firm direction, U.S. S&P and Nasdaq futures each rose about 0.3% in early Asia trading, and Japan's Nikkei gained 0.8% after having been on holiday for Monday's rally.

"It's a bit like 'paint by numbers' at the moment, you've got a picture to fill in, but we don't have all the colours yet," said Kerry Craig, global market strategist at JPMorgan Asset Management.

"There are a couple of things missing (such as) the direction of the labour market and unemployment rate in the U.S., and whether central banks will step back and say 'that's the peak in inflation and we don't need to be as hawkish', or 'we're going to be really aggressive'."

Markets are expecting a large 75 basis point interest rate hike at the U.S. Federal Reserve's meeting next week, moving away from a flirtation with the chance of an enormous 100 basis point rise, though market pricing still indicates a 30% chance, according to the CME's Fedwatch tool.

The retreat from expectations of 100 basis points late last week helped shares to gain in the U.S. on Friday and Asia and Europe on Monday.

The European Central Bank and Bank of Japan both meet on Thursday, with the ECB widely expected to begin raising rates from their pandemic era lows with a 25 basis point hike, while little change is expected from the ultra dovish BOJ.

"In the background we've got earnings season in the U.S. and we're expecting that to be another source of pressure on markets as we think the full year guidance for around 9%-10% of the U.S. is too high," said Craig.

Goldman Sachs Group Inc warned overnight it may slow hiring and cut expenses, as the economic outlook worsens, after reporting a 48% slump in quarterly profit. But, as this beat analysts' expectations, its shares rose 2.5%.

In currency markets, the dollar continued its slow retreat from last week's two decade peak.

The euro was $1.0143 having recovered from its brief fall below one U.S. dollar last week for the first time since 2002, and one dollar bought 138.34 Japanese yen, below its 24-year high of 139.39 also hit last week.

The U.S. benchmark 10 year yield was 2.9781%, having struggled so far this month to break far in either direction from the 3% level.

The two-year yield was at 3.1702%.

Oil, another asset class struggling to find a clear direction, was trading flat having pared early losses, after gaining 5% overnight.

Brent crude was at $106.30 a barrel, and U.S. crude was at $102.58. Spot gold remained soft at $1,706 an ounce.

(Editing by Christian Schmollinger)