GLOBAL MARKETS-World shares gain for eighth day in a row; Wall Street set for stronger open

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog: LIVE/

(Updates prices, adds commentary)
By Elizabeth Howcroft
LONDON, Feb 10 (Reuters) - World shares rose for the eighth
day in a row, reaching record highs, while market sentiment was
improved by the prospect of U.S. fiscal stimulus and vaccine
rollouts, before a speech by U.S. Federal Reserve Chair Jerome
Powell.
The MSCI world equity index, which tracks shares in 49
countries, was up 0.3% at 1116 GMT, having touched new peaks
earlier in the session .MIWD00000PUS .
Overnight, MSCI's ex-Japan Asian shares index also broke
above its previous high, in January .MIAPJ0000PUS .
European indexes strengthened after a shaky start, with the
STOXX 600 up 0.3% .STOXX and London's FTSE 100 up 0.4%
.FTSE .
The recent gains stem from a combination of the market
pricing in increased U.S. fiscal stimulus, as well as some
relief that the retail trading frenzy in certain stocks appears
to be over in the short-term, said Kiran Ganesh, multi-asset
strategist at UBS.
"The prospects for fiscal stimulus in the U.S. seem to be
getting revised upward ... Now, Biden is talking about $1.9
trillion," he said -- around 9% of U.S. GDP.
UBS expects that after negotiations with Republicans the
stimulus will come to around $1.5 trillion.
"There's still plenty of excitement to get priced in around
the stimulus," he said. "The path of least resistance still
seems to be upward at this stage."
U.S. President Joe Biden said on Tuesday he agreed with a
proposal by Democratic lawmakers that would limit or phase out
stimulus payments to higher-income individuals as part of his
COVID-19 relief bill. Oil prices extended their rally for the ninth consecutive
day -- the longest winning streak in two years -- supported by
producer supply cuts and expectations that vaccine rollouts will
drive a recovery in demand. But Eric Vanraes, a portfolio manager at Eric Sturdza
Investments, said bond and equity markets were too optimistic.
"There is a lot of optimism in markets about the end of the
crisis. But nobody knows when that will be -- we don't want this
scenario to take place but cannot totally exclude that later
this year we could still be with this pandemic with the same
problems of lockdowns," he said.
China's consumer price index fell more than expected, but
factory prices posted their first year-on-year rise in 12
months, suggesting gathering momentum in the industrial sector.
The dollar slipped against a basket of currencies, down 0.1%
at 90.374 at 1125 GMT, having hit a two-week low =USD .
U.S. CPI data is due later in the session. Also in focus in
a webinar in which the Fed's Powell will speak about the state
of the U.S. labour market at 1900 GMT.
"Markets will probably be looking out for any comments
around inflation because that is something that is likely to
rise quite substantially in the near term at least, because of
year-over-year comparisons," said UBS's Ganesh.
"Markets are going to be looking for reassurance that the
Fed is not going to jump or overreact to a temporary period of
higher inflation."
The 10-year Treasury yield was little changed at 1.1637%,
having dipped from a spike on Monday to its highest since March
last year US10YT=RR .
Earnings also contributed to market optimism, with French
bank Societe Generale among those beating fourth-quarter profit
expectations. After Wall Street pulled back on Tuesday, S&P 500 futures
pointed towards a stronger open, up 0.4% EScv1 .
In Europe, the benchmark 10-year German Bund yield was
steady at -0.442%. Italian borrowing costs hit a one-month low
on Tuesday as Mario Draghi made progress in his attempt to form
a government. The euro was little changed at $1.2123, having reached its
highest in nine days EUR=EBS .
Elsewhere, bitcoin was trading around $46,575 BTC=BTSP and
Ethereum hit record highs ETH= .

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Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
MSCI world stock index cruising at record highs https://tmsnrt.rs/3qaUqvu
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