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GLOBAL MARKETS-Stocks, euro rise on China data; Fed uncertainty remains

Wanfeng Zhou
Monday, 9 Dec 2013 | 12:02 PM ET

* U.S., European shares edge up, but Fed uncertainty caps gains

* Robust China trade data a promising sign for global growth

* Japanese shares jump as yen hits 5-year trough on euro

* Bonds steady, euro at six-week high vs dollar

NEW YORK, Dec 9 (Reuters) - Stock markets worldwide rose on Monday and the euro climbed to a six-week high against the dollar after Chinese trade and inflation data boosted optimism about the global economy.

Gains in stocks were limited as investors looked to speeches from top Federal Reserve officials later in the day for clues on whether Friday's strong U.S. jobs data could prompt the U.S. central bank to start reducing its bond buying this month.

China's exports handily beat forecasts in November, adding to evidence of a stabilization in the world's second-largest economy, while an unexpected drop in consumer inflation eased fears of any imminent policy tightening.

The latest solid data from major economies has boosted confidence that the global economy is recovering well enough to withstand a scale-back in Fed stimulus, though uncertainty about the timing and impact of a move could keep a lid on markets into year's end.

"The strong labor data out of the U.S. and the robust trade balance numbers from China suggest that global growth may be better than consensus view," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.

The MSCI world equity index, which tracks shares in 45 countries, rose 0.4 percent.

The Dow Jones industrial average gained 21.00 points, or 0.13 percent, at 16,041.20. The Standard & Poor's 500 Index was up 4.78 points, or 0.26 percent, at 1,809.87. The Nasdaq Composite Index was up 8.20 points, or 0.20 percent, at 4,070.72.

Richmond Fed President Jeffrey Lacker will speak at an economic outlook conference in Charlotte, North Carolina, at 12:30 p.m. EST (1730 GMT). Later, St. Louis Fed President James Bullard and Dallas Fed President Richard Fisher also speak.

"Today's economic calendar is light, but several Federal Reserve officials are slated for speeches, keeping the debate over the Fed's tapering timeline alive and well," said Tony Venosa, senior options strategist at Schaeffer's Investment Research in Cincinnati, Ohio.

European shares edged up 0.2 percent, while Tokyo's Nikkei climbed 2.3 percent.

The Fed will start reducing its massive bond-buying program no later than March, according to a Reuters poll on Friday after the strong jobs data, with a handful of Wall Street firms expecting it to take action as early as December.

The Fed has had considerable success in persuading investors that tapering is not tightening, and that interest rates will remain low for a long time to come.

The benchmark 10-year U.S. Treasury note was up 11/32, the yield at 2.8407 percent.

YEN SLIPS

The euro rose as high as $1.3730, according to Reuters data, as short-term interest rates in the euro zone money market edged up after the European Central Bank last week dented speculation of any imminent easing.

Against the yen, the euro climbed to 141.67, reaching highs not seen since October 2008. It was last trading at 141.62 yen, up 0.4 percent on the day.

The dollar gained 0.3 percent to 103.21 yen, not far from the six-month peak of 103.37 set last Tuesday. The yen continued to underperform on the Bank of Japan's ultra-loose monetary policy and the pick-up in risk appetite.

Strong Chinese data helped lift copper prices, while spot gold rose to $1,234.01 an ounce from $1,228.24.

Brent futures fell $1.78 a barrel to $109.83 as well-supplied markets and limited demand from European refiners pushed prices lower. But U.S. crude was up 5 cents at $97.70.

Emerging market attention remained on Thailand after Prime Minister Yingluck Shinawatra called snaps elections in an attempt to defuse the country's tensions.

The Thai baht rose almost 1 percent versus the dollar initially, only to backslide along with Bangkok shares as anti-government protest leaders vowed to fight on.