Wires

GLOBAL MARKETS-Stocks cling to gains on trade hopes, mixed earnings weigh on Europe

Karin Strohecker

Europe@

* Mixed earnings weigh on European bourses

* Nikkei hits one-year high after S&P 500 reaches record

* Trump talks up progress on China trade

* EU grants Britain three-month Brexit extension

* Market sees Fed cutting rates, cautious on outlook

LONDON, Oct 29 (Reuters) - World stocks hovered near a 15-month high on Tuesday underpinned by cautious optimism over a Sino-U.S trade deal and expectations of another dose of policy stimulus from the Federal Reserve, with safe havens such as gold and yen on the back foot.

A mixed bag of earnings offset some of the chipper mood on European bourses, with the pan-regional STOXX 600 snapping a six-day losing streak to ease 0.4% and Germany's DAX index easing 0.2%.

The losses in Europe followed a mixed performance in Asia, where Japan's Nikkei rose 0.4% to reach levels last seen a year ago. Shanghai blue chips dithered either side of flat.

U.S. President Donald Trump said on Monday he expected to sign a significant part of a trade deal with China ahead of schedule but did not elaborate on the timing.

The U.S. trade representative also said Washington was studying whether to extend tariff suspensions on $34 billion of Chinese goods set to expire on Dec. 28.

But analysts cautioned that trade tensions were far from over.

"It isn't yet clear that an interim deal that kicks trade worries down the road would be sufficient to allay concerns about the geopolitical, economic, earnings, and policy backdrop," Mark Haefele, CIO at UBS Global Wealth Management.

"President Trump's announcement of a Chinese commitment to buying $4050 billion of U.S. agricultural products appears unrealistic U.S. exports to China peaked at just $26 billion in 2012, when prices were much higher."

U.S. futures pointed to a mixed open on Wall Street after Monday's rally that saw the S&P 500 gain 0.56% to a record closing peak and the Dow rise 0.49% and the Nasdaq 1.01%.

Microsoft Corp climbed 2.46% in late NY trade after winning the Pentagon's $10 billion cloud computing contract, beating out Amazon.com Inc.

Google parent Alphabet Inc meanwhile slipped after missing analysts' estimates for quarterly profit even though revenue growth topped expectations.

WAIT AND SEE

With markets in wait and see mode for Fed and trade developments, bond yields inched lower. Germany's benchmark 10-year bond yield hovered just below three-month highs hit on Monday, when yields across the single currency bloc rose sharply after the European Union granted Britain a Brexit extension.

Yields on two-year Treasury notes were treading water after hitting four-week highs on Monday at 1.668%.

Investors are still looking forward to a likely rate cut from the Federal Reserve on Wednesday, though the outlook was less clear beyond that.

"We expect the Federal Reserve will cut rates this week and possibly once next year, as insurance against a broad economic slowdown," BlackRock's chief fixed income strategist, Scott Thiel, said in a note to clients.

The futures market has 50 basis points of cuts priced in by June.

Central banks in Japan and Canada also meet this week, with talk the former might ease further if only to prevent an export-sapping bounce in its currency.

The shift from safe harbours saw the yen weaken slightly, with the dollar standing at 108.89 yen after having reached its highest in three months. It was eyeing a key technical level at 109.31.

The euro edged up to $1.1095 and was little changed against a basket of currencies at 97.782.

The British pound meanwhile fell towards a 10-day low, nearing $1.28 against a broadly stronger greenback as investors waited for Prime Minister Boris Johnson's next attempt to push for a general election before the end of the year.

Spot gold hovered at $1,493 per ounce, after having pulled away from last week's top around $1,517.

Oil prices were pressured by signs of rising U.S. crude stock piles.

Brent crude futures slipped 45 cents to $61.12 a barrel, while U.S. crude lost 53 cents to $55.28.

(Reporting by Karin Strohecker, additional reporting by Wayne Cole in Sydney; Editing by Nick Tattersall)