* Europe's FTSEurofirst 300 index up 0.4 pct, off 2012 high
* Markets await ECB president's comments on policy outlook
* Euro slides back from 7-week high against dollar
* Oil, gold steady, cautious ahead of U.S. jobs report
By Richard Hubbard
LONDON, Dec 6 (Reuters) - European stocks touched a high for
the year on Thursday while the euro steadied as investors
awaited the outcome of a European Central Bank policy meeting
for signs of any future rate cuts.
The ECB is expected to keep its benchmark rate at 0.75
percent but will probably slash its growth outlook for 2013,
prompting some in the market to presume President Mario Draghi
will signal a bias towards future policy easing.
"I'm not convinced at this stage that the door is open to a
further rate cut," said Peter Dixon, global equities economist
at Commerzbank. If the central bank were to ease next year it
would be via liquidity measures such as bond buying, he added.
The prospect of more support from Europe's central bank,
signs of gathering momentum in China's giant economy and the
modest recovery in the United States have encouraged demand in
the world's main equity markets ahead of the new year.
The MSCI world equity index, which has
gained over 11 percent so far this year, added 0.25 percent to
333.75 points, helped by big gains in Asian shares outside Japan
, which have reached 16-month highs.
In Europe the FTSEurofirst 300 index of top
companies hit a 2012 high of 1,132.79 points in early trade,
before edging back to be up 0.4 percent. London's FTSE 100
, Paris's CAC-40 and Frankfurt's DAX
were as much as 0.8 percent higher.
"The momentum is positive for equity markets, which remain
cheap compared with credit and government bonds," said Frederic
Jamet, head of management at State Street Global Advisors
However, the lack of any progress in Washington at talks
among politicians to avoid the "fiscal cliff" of spending cuts
and tax rises starting in January is limiting the gains.
U.S. stock index futures pointed to a higher open on Wall
Street on Thursday, boosted by hopes a budget deal will be
reached before the year-end.
Financial markets were reassured on Wednesday when
President Barack Obama said a deal was possible in "about a
week" if Republicans compromise on taxes. No side has yet made
The lack of a breakthrough supported safe-haven government
bonds, keeping German Bund futures within tight ranges. Ten-year
U.S. Treasury yields were hovering near a three-week low at 1.59
The euro, which hit a seven-week high of $1.3127 on
Wednesday, traded at $1.3060, barely changed on the day.
"We've seen something of a reversal in confidence," said
Jeremy Stretch, head of currency strategy at CIBC World Markets.
"Looking ahead, the ECB is unlikely to cut rates but most
likely to underline the ongoing weakness in the euro zone
economy. Confirmation that the euro zone remains in recession is
certainly not providing any underlying support for the euro."
The Bank of England left its policy unchanged on Thursday, a
month after completing its latest quantitative easing programme,
as sticky inflation outweighed worries over a sluggish economy.
Ahead of the outcome of the ECB meeting, French long-term
bond yields fell at its first debt sale since Moody's downgraded
the euro zone's No. 2 economy last month, as investors continued
to seek the liquidity and safety of the French market.
Riskier Italian and Spanish government bond yields rose as
investors' recent enthusiasm for peripheral debt fades following
a disappointing auction by Madrid on Wednesday.
In crude oil and other commodity markets gains were being
checked by niggling worries about the growth outlook for the
global economy ahead of Friday's release of the U.S. non-farm
payrolls report for November.
Three-month copper on the London Metal Exchange was
down 0.1 percent at $8,065 a tonne, reversing gains from the
previous session when it hit its highest since Oct. 19.
Data from Asia on Thursday added to the uncertainty about
the prospect for future demand. South Korea's central bank said
that growth this year in Asia's fourth-largest economy would
probably fall below its 2.4-percent target.
U.S. crude futures rose 3 cent to $87.91 a barrel,
while Brent was down 3 cents at $108.76.
"Overall, the markets are weak with the global economic
concerns and will be trapped in a range until the U.S. 'fiscal
cliff' issue is behind us," said Tony Nunan, an oil risk manager
with Mitsubishi Corp in Tokyo.
Spot gold was around $1,693.00 an ounce, near the
one-month low of $1,684.40 that it hit on Wednesday after a
weaker price forecast by Goldman Sachs.