* MSCI’s World Index hits highest since October
* U.S. oil hits 3-month high
* Fed’s FOMC uncommitted in minutes of latest meeting (Updates to U.S. market close)
By Rodrigo Campos
NEW YORK, Feb 20 (Reuters) – An index of stocks across the globe hit a more than four-month high on Wednesday on hopes for progress in trade talks between the United States and China, and a supportive backdrop from major central banks also helped push risk assets higher.
Crude prices rose to their 2019 highs helped by output cuts from top producers as well as U.S. sanctions on OPEC members Iran and Venezuela. started with a rally in Asia that pushed the MSCI world equity index .MIWD00000PUS to its highest since October after U.S. President Donald Trump said negotiations with China were going well and suggested he was open to extending the deadline to complete them beyond March 1. had feared U.S. tariffs on $200 billion worth of Chinese imports would rise to 25 percent from 10 percent if no trade deal was reached by then.
European stock indexes also strengthened, with a region-wide index .STOXX at a four-month high.
On Wall Street, stocks wobbled before ending higher after Federal Reserve policymakers signaled they will soon lay out a plan to manage the bank’s $4 trillion balance sheet, but policymakers are still debating how long their newly adopted “patient” stance on U.S. rates policy will last. tone of the Fed meeting “was decidedly noncommittal, and the minutes recreated this noncommittal message in more detail,” said Jefferies analysts led by Ward McCarthy in a note.
“The FOMC is on track to curtail the normalization of the balance sheet without providing any solid reasoning for doing so.”
The Dow Jones Industrial Average .DJI rose 63.12 points, or 0.24 percent, to 25,954.44, the S&P 500 .SPX gained 4.94 points, or 0.18 percent, to 2,784.7 and the Nasdaq Composite .IXIC added 2.30 points, or 0.03 percent, to 7,489.07.
The pan-European STOXX 600 index .STOXX rose 0.67 percent and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.47 percent.
Emerging market stocks rose 1.19 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.13 percent higher. Hong Kong’s Hang Seng .HSI gained 1 percent to close at the highest level since August.
While hopes for a trade deal between the world’s two largest economies are seen as the primary driver for world stocks, dovish central bank messages from the United States to Asia and the ECB are also playing a part. currency markets, the dollar index.DXY rose 0.04 percent, with the euro EUR= down 0.02 percent to $1.1338 while sterling GBP= was last trading at $1.3047, down 0.11 percent on the day.
The Japanese yen weakened 0.20 percent versus the greenback at 110.87 per dollar after Japan recorded its biggest annual drop in exports in January for more than two years, and on recent dovish Bank of Japan signals.
The offshore yuan CNH= rose 0.4 percent against the dollar after touching a three-week high of 6.7067.
U.S. oil prices rose above $57 per barrel for the first time in three months supported by OPEC-led supply cuts and U.S. sanctions on Iran and Venezuela, but soaring U.S. production and expectations of an economic slowdown kept the market wobbly. O/R
U.S. crude CLcv1 rose 1.47 percent to $57.28 per barrel and Brent LCOcv1 was last at $67.14, up 1.04 percent on the day.
U.S. Treasury yields ticked up after the Fed minutes showed committee members were undecided on whether to hike interest rates again this year.
Benchmark 10-year notes US10YT=RR last fell 1/32 in price to yield 2.6483 percent, from 2.645 percent late on Tuesday.
The 30-year bond US30YT=RR last fell 7/32 in price to yield 2.9984 percent, from 2.988 percent late on Tuesday.