* 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. 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. 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. United States also expanded its rollout of the newly approved vaccine developed by Pfizer Inc. (NYSE:PFE) PFE.N and BioNTech SE BNTX.O . expect guidance later in the day on when and how the Fed might change its bond purchases. 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 (NYSE:STT) 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. 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. 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
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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
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