(Adds detail, updates prices) * World shares rise 0.4%, oil up 1%, U.S. dollar falls * U.S. stock index futures point to strong start * Yellen to say U.S. must ‘act big’ on relief package * Italian bond yields drop ahead of confidence vote * 2021 asset performance tmsnrt.rs/2yaDPgn MILAN, Jan 19 (Reuters) - Global shares climbed and the dollar eased on Tuesday before Janet Yellen’s Treasury Secretary confirmation speech, in which she is expected to bolster the case for heavy fiscal stimulus in the world’s largest economy. Concern that pandemic lockdowns could slow the road to economic recovery faded as markets prepared for possible positive surprises from the earnings season. Asian shares posted strong gains and in Europe upbeat earnings reports, including from computer peripherals maker Logitech, helped the STOXX 600 index edge up by 0.1%, offsetting a possible extension of lockdowns in Germany. Wall Street looked set for a strong start, with S&P 500 futures rising 0.7% and Nasdaq futures up 0.8% after the long holiday weekend. The MSCI world equity index, which tracks shares in 49 countries, was up 0.4% by 1231 GMT. “Yellen ... will attempt to sell U.S. President-elect (Joe) Biden’s $1.9 trillion fiscal stimulus plan (arguing that low interest rates allow a big fiscal stimulus),” Paul Donovan, chief economist of UBS Global Wealth Management, said in a note. “If the growth rate generated by government investment in infrastructure or people exceeds the cost of borrowing, it is a worthwhile exercise.” Yellen will tell the Senate Finance Committee that the government must “act big” with its next coronavirus relief package, according to her prepared statement seen by Reuters. Asian shares had climbed on investor expectation that China’s economic strength would help to underpin growth in the region. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% to a record high. Data on Monday confirmed that the world’s second-largest economy was one of the few to grow over 2020 and actually gathered pace as the year drew to a close. Analysts at JPMorgan felt the coming earnings season could brighten the mood, given the consensus in Europe was for a 25% fall year on year, setting a very low bar. “The projected EPS (earnings per share) growth in Europe now stands at the lows of the crisis, which seems too conservative and could likely lead to positive surprises over the reporting season,” they wrote. The same could be true for the United States. Bank of America shares rose in pre-market trade after results while investors were awaiting for results from Goldman Sachs and Netflix later on Tuesday. Morgan Stanley, IBM and Intel are slated later this week. Despite the risk-on mood on Tuesday, some dealers were wary before President-elect Biden’s inauguration on Wednesday, fearing more mob violence. Wall Street is also bracing for tougher regulations now that the Democrats control the Senate, with Biden set to nominate two consumer champions to top financial agencies. In foreign exchange markets, the U.S. dollar slipped from close to its highest in nearly a month as caution set in before Yellen’s speech, where she is expected to reaffirm commitment to a market-determined exchange rate. The dollar index fell 0.3% to 90.48 but remained comfortably above its recent trough of 89.206. The euro rose 0.5% to $1.212 after touching a six-week low of $1.2052 in the previous session. The dollar weakened by 0.3% against the safe-haven yen at 103.9. In fixed-income markets, Italian 10-year bond yields fell to 0.584% before a confidence vote in the Senate that could force Prime Minister Giuseppe Conte to resign. But expectations that snap elections are unlikely, coupled with European Central Bank stimulus to fight the adverse impact of the coronavirus crisis, limited any sell-off. Gold rose 0.1% to $1,838.3 an ounce, recovering from a six-week low of $1,809.90 briefly hit on Monday. Optimism that government stimulus will buoy global economic growth and oil demand lifted crude oil prices. Brent crude futures rose 1.1% to $55.36 a barrel and U.S. crude was up 0.3% at $52.5. (Reporting by Danilo Masoni, additional reporting by Wayne Cole and Julie Zhu, editing by David Goodman, Larry King)