* Euro regains footing, but ECB under pressure to boost stimulus
* Wall St climbs on expectations Fed to keep stimulus
* European shares inch up to new 5-year highs
* Oil rises to $106/bbl, lifted by Libya, product supply drop
NEW YORK, Nov 6 (Reuters) - Global equity markets rose on Wednesday on robust European economic data and talk the Federal Reserve will keep stimulus alive longer than expected, while the euro rose on speculation the European Central Bank won't cut interest rates this week. The euro hit session highs against the dollar and yen after a report from Market News International said an ECB rate cut was unlikely, despite a drop in euro zone inflation. Market News reported the ECB would avoid a rate cut on Thursday, citing two "Eurosystem" sources. The euro climbed to the session's peak of $1.3547 and was last at $1.3541, up 0.5 percent. Against the yen, the euro rose to session highs of 133.72, and was last at 133.61 yen, up 0.68 percent. German Bund futures erased gains on news of the Market News report. Bund futures were flat at 141.16, after earlier trading as high as 141.44. Wall Street opened higher, following gains in Europe, after John Williams, president of the San Francisco Federal Reserve Bank, said Tuesday the Fed should wait for stronger evidence of economic growth before paring its massive bond-buying program.
Research papers by two top Fed economists that suggest the central bank has the scope for even more economic stimulus and for more relaxed thresholds on when to raise rates also helped lift shares. "There's a presumption the market is going to keep going up and it's a self-fulfilling prophecy," Brad McMillan, chief investment officer at Commonwealth Financial in Waltham, Massachusetts. "I think it's just sentiment. I don't think there's anything in particular driving it; this isn't a data-driven market as best I can tell," McMillan said. All three major U.S. stock indexes initially rose, near year highs, but the Nasdaq later retreated. The Dow Jones industrial average was up 89.94 points, or 0.58 percent, at 15,708.16. The Standard & Poor's 500 Index was up 5.37 points, or 0.30 percent, at 1,768.34. The Nasdaq Composite Index was down 6.70 points, or 0.17 percent, at 3,933.16. In Europe, the FTSEurofirst 300 of leading regional shares rose 0.34 percent to 1,296.00, after briefly touching 1,300 for the first-time since early June 2008. The euro zone's economy lost a little momentum last month, according to surveys that showed only modest growth in German and French businesses. But data from non-euro zone Britain impressed again and German industrial orders jumped underlining the uneven nature of the region's recovery. U.S. government debt traded mixed. The benchmark 10-year U.S. Treasury note was up 3/32 in price to yield 2.6494 percent, while the 30-year bond was down. Brent oil rose to $106 a barrel, supported by a fall in U.S. oil product inventories and worries about prolonged weakness in supply from Libya as the peak northern hemisphere winter heating season looms. Brent crude gained 77 cents to $106.10 a barrel, while U.S. oil rose $1.19 to $94.56 a barrel.