LONDON (Reuters) - Global equity markets held at their best levels in over three weeks on Monday, reflecting some hopes that the worst of tariff pain is over, but confusion over U.S. trade policy lingered and trapped the dollar.

European shares opened higher, U.S. stock futures were mixed and Asia made fractional gains at the start of an earnings-heavy week that also sees the release of key U.S. jobs data and is book ended with elections in Canada and Australia. U.S. President Donald Trump looms large in both.

Trade tensions remained a key focus.

While Trump has claimed progress is being made on trade with China, and many other countries, evidence is lacking. Treasury Secretary Scott Bessent failed on Sunday to back Trump's assertion that tariff talks with China were under way.

"The fact that we are going through a de-escalation in trade tensions doesn't mean that we won't still get a growth slowdown," said Mike Kelly, global head of multi-asset at PineBridge Investments.

The often confusing rollout of tariffs is expected to inflict lasting damage on the global economy as uncertainty weighs on business and consumer confidence, slowing investment and spending.

"Uncertainty is not just about a one-off event but its duration," Kelly added.

MSCI's world stock index hovered near its highest levels since April 3, the day after Trump unveiled his reciprocal tariffs that roiled markets.

Japan's Nikkei rose 0.4%, while Chinese blue chips were little changed as officials stuck with their economic growth projections, despite the drag from tariffs.

European shares opened broadly firmer. Going the other way, S&P 500 futures dipped 0.25% and Nasdaq futures eased 0.3%. The S&P has bounced almost 12% from an April 8 trough, but remains 10% below its peak. [.N]

Corporate earnings have been generally supportive, with gains of more than 9%, though BofA noted 64% of companies had beaten earnings per share (EPS) guidance, compared to 71% the previous quarter.

"Despite having played second fiddle to geopolitics of late, the U.S. earnings season is moving along well and is on track for its seventh consecutive quarter of positive earnings' growth," said Rory McPherson, chief investment officer at Wren Sterling.

About 180 S&P 500 companies representing over 40% of the index's market value report this week, including mega-caps Apple, Microsoft, Amazon and Meta Platforms.

DOLLAR HELD HOSTAGE

In currency markets, the dollar was mostly steady but struggling to make headway as trade wariness lingered.

At 143.81 yen and $1.1345 per euro the greenback has, for now, found a footing, while staying on course for its largest monthly fall in nearly 2-1/2 years as Trump has rattled confidence in the dependability of U.S. assets.

It is down more than 4% on both the euro and the yen in April, though bounced at the end of last week on a conciliatory shift in the tone of U.S.-China relations.

A solid U.S. jobs report on Friday could aid the dollar's bounce if it dampens Federal Reserve rate cut expectations, analysts said.

Money markets imply a roughly 65% chance of a rate cut in June and 85 basis points of easing by year-end.

"The greenback is still hostage to the (U.S.) administration's whims," said Jonas Goltermann, deputy chief markets economist at Capital Economics.

Inflation numbers for Germany and the euro zone due this week meanwhile are expected to show a further dip in headline inflation, adding to expectations the European Central Bank will cut rates again at its June meeting.

The Bank of Japan meets this week and is considered certain to hold rates at 0.5%, given the economic and trade uncertainty caused by U.S. tariffs argues against another hike.

Treasuries have also steadied in the wake of Trump's assurance he would not try to fire Fed Chair Jerome Powell, leaving 10-year yields at around 4.25% compared to the April top of 4.592%.

Former Federal Reserve Governor Kevin Warsh, with whom Trump is reported to have discussed firing Powell and installing him in his place, on Friday unleashed a barrage of criticism of the Fed and argued for fundamental changes to how it operates.

A tentative improvement in risk sentiment saw gold slip 0.8% to $3,290 an ounce, from its all-time peak of $3,500. [GOL/]

Oil prices were little changed, with Brent flat around $67 a barrel, while U.S. crude added 0.25% to $63.16 per barrel.