* MSCI's World Index hits highest since October
* U.S. oil hits 3-month high
* FOMC minutes due as central bank doves dominate (New throughout, updates prices, market activity and comments; new byline, changes dateline, previous LONDON)
By Rodrigo Campos
NEW YORK, Feb 20 (Reuters) - World stocks rose on Wednesday, hitting a four-month high 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.
Sterling shot up in mid-morning New York trading to turn positive on the day versus the U.S. dollar after Bloomberg News reported the Spanish foreign minister said a Brexit accord was being "hammered out." 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 regional index .STOXX at a four-month high. Wall Street stocks were little changed, with the S&P 500 hovering near its 2019 high.
Traders awaited the release on Wednesday of minutes from the Federal Reserve's January meeting, at which policymakers effectively signaled no further rate hikes and possible tweaks to balance sheet normalization.
"Investors expect more details regarding the shrinking of the Fed's balance sheet and obviously more clues on the Fed pause," Peter Cardillo, chief market economist at Spartan Capital Securities, wrote in a client note.
The Dow Jones Industrial Average .DJI rose 19.35 points, or 0.07 percent, to 25,910.67, the S&P 500 .SPX gained 2.95 points, or 0.11 percent, to 2,782.71 and the Nasdaq Composite .IXIC added 18.07 points, or 0.24 percent, to 7,504.83.
The pan-European STOXX 600 index .STOXX rose 0.70 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.49 percent.
Emerging market stocks rose 1.48 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.29 percent higher, while Japan's Nikkei .N225 rose 0.60 percent. 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 dipped against a basket of major currencies .DXY after the Brexit-linked rise in sterling also pulled the euro higher.
The dollar index .DXY fell 0.16 percent, with the euro EUR= up 0.19 percent to $1.1361 while Sterling GBP= was last trading at $1.3073, up 0.08 percent on the day.
The Japanese yen weakened 0.06 percent at 110.71 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 0.5 percent against the dollar to a three-week high of 6.7131.
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 1.63 percent to $57.37 per barrel and Brent LCOcv1 was last at $67.14, up 1.04 percent on the day.
Benchmark 10-year notes US10YT=RR last fell 2/32 in price to yield 2.65 percent, from 2.645 percent late on Tuesday.
The 30-year bond US30YT=RR last fell 11/32 in price to yield 3.0055 percent, from 2.988 percent late on Tuesday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets in 2019
http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additionmal reporting by Kate Duguid and Richard Leong in New York and Shreyashi Sanyal in Bengaluru; Editing by David Gregorio)