* Trump's trade comments boost markets, Wall St stocks gain
* Pound traders lock in profits before British election result
* Dovish Fed, ECB message also help risk trade
(Updates with U.S. market open; adds commentary; changes byline, dateline; previous LONDON)
By Sinéad Carew
NEW YORK, Dec 12 (Reuters) - MSCI's global stock index hit a record high on Thursday after President Donald Trump said the United States was "very close" to reaching a trade deal with China.
The comment, days before new U.S. tariffs on Chinese imports were to be imposed, sent U.S. Treasury yields and the U.S. dollar index higher, while stock indexes on Wall Street reversed course to gain almost 1%. weakened from an eight-month high versus the dollar with voting underway in an election that will determine whether Britain exits the European Union next month or lead to another referendum that could reverse the country's previous vote in favor of Brexit. European Central Bank head Christine Lagarde had promised a strategic review of the bank's workings and left its easy money stance unchanged, as expected. Wednesday, the U.S. Federal Reserve held interest rates steady and signaled borrowing costs will not change anytime soon, with moderate economic growth and historically low unemployment expected to persist through the 2020 presidential election. reason things have rebounded is the President's comment that the U.S. is close to a deal... Until we actually have something firm, I'm skeptical," said Burns McKinney, portfolio manager at Allianz (DE:ALVG) Global Investors in Dallas.
"The Fed meeting, the UK election and the ECB meeting are potential speed bumps. The Dec. 15 deadline is not a speed bump. That's a great big pot hole."
The Dow Jones Industrial Average .DJI rose 194.73 points, or 0.7%, to 28,106.03, the S&P 500 .SPX gained 20.79 points, or 0.66%, to 3,162.42 and the Nasdaq Composite .IXIC added 44.09 points, or 0.51%, to 8,698.15.
The pan-European STOXX 600 index .STOXX rose 0.59% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.65% surpassing the previous record reached in January 2018.
In the currency market, trade optimism strengthened the U.S. dollar. The dollar index, which measures the greenback against a group of major currencies, .DXY rose 0.34%, with the euro EUR= down 0.09% to $1.1118. The Japanese yen weakened 0.64% versus the greenback at 109.27 per dollar.
As markets waited for results of the UK election, sterling GBP= was last trading at $1.3131, down 0.47% on the day. U.K. Conservatives, led by Boris Johnson, gain a majority, that would allow the stalled Brexit deal to be passed. But the latest polls have shown his lead shrinking. polls for Britain's election will begin around 2200 GMT, after voting closes. Whether there will be a clear winner or another hung parliament is likely to emerge between 0400 GMT and 0600 GMT. Treasury yields spiked on Thursday, with the long end hitting four-week highs after the trade deal comments. 10-year notes US10YT=RR last fell 31/32 in price to yield 1.8974%, from 1.79% late on Wednesday.
The 30-year bond US30YT=RR last fell 79/32 in price to yield 2.3327%, from 2.22% late on Wednesday.
Oil prices rose on trade optimism and after the U.S. Federal Reserve's optimistic tone on the economic outlook. OR
U.S. crude CLcv1 rose 0.9% to $59.29 per barrel and Brent LCOcv1 was last at $64.36, up 1% on the day.
In commodities, spot gold XAU= dropped 0.6% to $1,466.43 an ounce. is a graphic plotting Sterling's move vs election odds:
https://tmsnrt.rs/2YHhmpw
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>