* MSCI world stocks hit record highs
* U.S. futures up 0.31%, European stocks up 1%
* U.S. dollar at lowest since April 2018
* Federal Reserve policy announcement due
By Carolyn Cohn
LONDON, Dec 16 (Reuters) - World stocks rose to record highs
on Wednesday as drugmakers rolled out COVID-19 vaccines and U.S.
congressional leaders expressed optimism about a stimulus deal,
with the upbeat mood dragging the safe-haven dollar to 2-1/2
year lows.
In Europe, markets were cheered by the possibility of a
Brexit trade deal, better-than-expected euro zone PMI economic
data and a European Central Bank decision to let euro zone banks
start paying dividends again if they have enough capital.
Markets are watching the U.S. Federal Reserve later on
Wednesday for hints that it will extend its stimulus programme,
and for whether it thinks the economy will suffer a double-dip
recession or is on the cusp of a vaccine-inspired boom.
E-mini futures for the S&P 500 ESc1 were up 0.31%, after
U.S. stocks climbed more than 1% overnight .N .
CMC Markets' senior analyst Michael Hewson said markets were
being driven up by three main factors - "the hopes of U.S.
stimulus, the hopes of a UK and EU (Brexit) trade deal and
better-than-expected PMIs".
"You have all three of these creating positivity and
optimism," he said, although he added that the impact of a new
set of lockdowns in Europe was still to be felt.
The MSCI world stock index .MIWD00000PUS hit a record high
of 636.64, and was later up 0.4%. The index has climbed 15%
since the beginning of November, propelled by trillions of
dollars worth of global stimulus.
European stocks .STOXX rose 1% to nine-month highs, with
the UK's FTSE 100 index .FTSE jumping 1.1%.
The MSCI broadest index of Asia Pacific shares outside of
Japan .MIAPJ0000PUS was 0.9% higher. The region is also near
record highs and up 3.8% so far in December, putting it track
for its best yearly performance since 2017.
U.S. congressional leaders reported substantial progress on
Tuesday after two meetings of top Democrats and Republicans to
end a months-long standoff on coronavirus relief and finalize a
$1.4 trillion funding bill to avert a government shutdown.
Sebastien Galy, macro strategist at Nordea Asset Management,
said the prospect of a stimulus deal "is rightfully welcomed by
the markets, but the size of the fiscal package is the issue".
SHOT IN THE ARM
Progress on rolling out vaccines continued after Moderna
Inc's COVID-19 vaccine appeared set for regulatory authorization
this week.
The United States also expanded its rollout of the newly
approved vaccine developed by Pfizer Inc. PFE.N and BioNTech
SE BNTX.O .
Analysts expect guidance later in the day on when and how
the Fed might change its bond purchases.
"We are not expecting a lot of fireworks from the Fed today
– they have already engineered very easy monetary conditions and
the tone of their messaging has been persistently dovish," said
Marija Vertimane, senior strategist at State Street Global
Markets. "This is unlikely to change ... in this meeting."
The dollar fell to its lowest since April 2018 against a
basket of currencies =USD in anticipation of the easy Fed
policy.
The euro rose above $1.22 EUR= for the first time since
April 2018, and German government bond yields DE10YT=RR , which
tend to rise on positive news on the economic outlook, hit a
one-week high after data showed better-than-expected business
activity in the bloc this month. GVD/EUR
The pound hit 12-day highs against the dollar GBP= and a
one-week high against the euro EURGBP= . It gained after
European Commission President Ursula von der Leyen said there
had been progress on a Brexit trade deal and that the next few
days would be critical.
The dollar fell to a 1-1/2 month low of 103.30 against the
Japanese yen JPY= and also hit its lowest in nearly six years
against the Swiss franc CHF= .
A long-overdue U.S. Treasury report on the foreign exchange
practices of U.S. trading partners could label several
countries, including Switzerland, as currency manipulators or
add them to a watchlist. Japan's Nikkei .N225 added 0.2%, China's blue-chip CSI 300
index .CSI300 added 0.15% and Hong Kong's Hang Seng index
.HSI climbed 0.86%.
In commodities, gold prices XAU= rose 0.4% to $1,860.20 an
ounce. GOL/
Gold has risen over 22% so far this year amid unprecedented
government stimulus globally.
Brent crude LCOc1 rose 4 cents to $50.80 a barrel and U.S.
crude CLc1 rose 2 cents to $47.64. O/R
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
Asia stock markets: https://tmsnrt.rs/2zpUAr4
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>