GLOBAL MARKETS-Shares hold firm on trade optimism, long-end yields move higher

By Samuel Indyk and Rocky Swift

LONDON, May 28 (Reuters) - Global shares were steady while the dollar held gains on promising signs on United States trade talks, while attention was turning to earnings from Nvidia NVDA.O later in the day.

Markets remained optimistic over what appeared to be easing trade frictions between the U.S. and Europe, but long-term yields rose again as a lacklustre auction of Japan's longest-dated bonds underscored lingering fiscal deficit concerns.

U.S. President Donald Trump said on Tuesday that the European Union's move to set up talks was positive, after walking back plans over the weekend to impose 50% tariffs on goods from the bloc.

"They are major trading partners so I'm optimistic there will be some sort of agreement in the end," said George Lagarias, chief economist at Forvis Mazars.

Europe's STOXX 600 .STOXX inched up 0.1%, adding to gains over the last two days. Britain's FTSE .FTSE and France's CAC 40 .FCHI both added 0.2%, while Germany's DAX .GDAXI rose 0.3% to another new record, supported again by rising defence stocks .SXPARO.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was little changed. Japan's Nikkei .N225 ended flat, after advancing for the previous three sessions.

China's CSI300 blue-chip index .CSI300 slipped 0.1%, while Hong Kong's Hang Seng Index .HSI fell 0.6%.

In the U.S., attention was on Nvidia, the last of the "Magnificent 7" tech giants to report earnings this season.

"There is renewed confidence that Nvidia can beat the consensus estimates," said Chris Weston, head of research at Pepperstone.

If Nvidia comes through with better-than-expected sales and profit margins "the rally is on", he added.

The chipmaker is expected to report that first-quarter revenue surged 66.2% to $43.28 billion, according to data compiled by LSEG.

Ahead of the results, Nasdaq futures NQc1 dipped 0.1%, while S&P 500 futures ESc1 eased by a similar amount.

EYES ON BOND YIELDS

A rise in longer-dated bond yields resumed on Wednesday, with concerns mounting about fiscal sustainability in many major markets, including the U.S., Japan and Britain.

Those concerns escalated in recent weeks after the U.S. sovereign rating was downgraded by Moody's and as Trump's bill for large-scale tax cuts passed in the House, before moving to the Senate.

"It all starts with the U.S. fiscal incontinence and an apparent repudiation of fiscal discipline," Forvis Mazars's Lagarias said.

"Because they have the global reserve currency, they are testing their ability to borrow as much as they can, but ultimately there is only so much the markets can handle."

Japanese bond yields rose overnight following tepid demand for an auction of 40-year notes, with the 40-year JGB yield JP40YTN=JBTC rising 9 basis points to 3.375%. Bond yields move inversely to prices. JP/

That lifted long-end yields across the globe, with the U.S. 30-year yield up 4 bps to 4.9769% and the 10-year yield US10YT=RR up 3.5 bps to 4.4694%.

In currency markets, the dollar index =USD, which tracks the U.S. currency against a basket of six peers, was steady after a 0.6% rally the day before. The euro was flat at $1.1329 EUR=EBS.

The kiwi dollar NZD=D3 rose 0.3% to $0.5969 after the Reserve Bank of New Zealand cut rates by 25 basis points as expected.

Oil prices ticked up as the U.S. barred Chevron CVX.N from exporting crude from Venezuela under a new authorisation on its assets there, raising the prospect of tighter supply.

Brent crude futures LCOc1 rose 0.5% to $64.41 a barrel, while U.S. crude CLc1 advanced 0.6% to $61.27 per barrel. Spot gold XAU= rose 0.7% after dropping more than 1% on Tuesday.