* UniCredit rises 8.3 percent as European stocks gain
* World shares up but off Monday highs; Wall St seen rising
* Italian bond yields fall, narrowing premium over Germany
* Fed expected to raise rates but markets focus on forecasts
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Nigel Stephenson
LONDON, Dec 13 Global shares edged up on
Tuesday, helped by gains in banks after Italy's largest lender
unveiled a 13 billion-euro share issue, while the dollar held
steady before a Federal Reserve meeting expected to deliver
higher interest rates.
Wall Street also looked set to rise, with index futures
about 0.3 percent higher .
UniCredit launched Italy's biggest share issue to
clean up its balance sheet and boost profitability, the latest
move to strengthen the Italian banking sector, which has been
clouding the outlook for European stocks.
UniCredit shares rose 8.3 percent and an index of Italian
banks added 3 percent as the pan-European STOXX 600
share index gained 0.8 percent.
"It's a hard medicine to swallow, but UniCredit's move to
raise billions of euros and a restructuring programme would put
the bank in a much better shape," said Koen De Leus, chief
economist at BNP Paribas Fortis.
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Markets were otherwise focused on the two-day Fed meeting,
which is almost certain to conclude with only the second rise in
U.S. interest rates since the global financial crisis.
While a hike of 25 basis points in the Fed's target range of
0.25-0.50 percent is priced in, investors will be examining the
Fed's statement and economic forecasts for any signs of how the
central bank thinks Trump's election affects the outlook for
growth and inflation.
"The big question is, what sort of pace can we expect from
the Fed for next year?" said Kaneo Ogino, director at foreign
exchange research firm Global-info Co in Tokyo.
The dollar was all but flat against a basket of major
currencies. The euro fell 0.2 percent to $1.0612
and the yen fell 0.2 percent to 115.24 per dollar.
U.S. 10-year Treasury yields, which popped above
2.5 percent on Monday for the first time since October 2014,
fell 3 basis points on Tuesday to 2.45 percent.
"We think the meeting may be a catalyst for people to take
some profit on long dollar positions," Barclays analyst Hamish
Sterling bucked the trend, rising 0.3 percent to
$1.2715, buoyed by comments from finance minister Philip Hammond
that Britain should have a transition period to smooth its exit
from the European Union.
Data showed UK consumer prices rose 1.2 percent year-on-year
last month, their biggest rise since October 2014.
MSCI's broadest index of Asia-Pacific shares outside Japan
edged up 0.2 percent, while Japan's Nikkei stock
index shrugged off losses as the yen pulled off its
highs and ended 0.5 percent higher.
Global shares, as measured by MSCI's all-country world index
, rose 0.3 percent but held below Monday's
16-month high, touched as crude oil prices surged after the
Organization of the Petroleum Exporting Countries and non-OPEC
producers reached their first deal since 2001 to reduce output.
Brent crude, the international benchmark, rose 1
percent on Tuesday to $56.23 a barrel but traded below Monday's
high of $57.89.
Italy's efforts to clean up its banks - the Treasury said on
Monday it was ready to bail out Monte dei Paschi di Siena if
necessary - pushed yields on its government debt lower and saw
the premium the country pays to borrow, compared with Germany,
squeezed to its narrowest in more than a month.
Italian 10-year yields fell 10 basis points to
1.91 percent while German equivalents fell 5 bps
to 0.36 percent.
This followed new Prime Minister Paolo Gentiloni announcing
an almost unchanged cabinet on Monday.
"The markets appear to be taking the developments in the
banking sector quite positively and the cabinet chosen by
Gentiloni has reassured investors," DZ Bank strategist Christian
Gold, which is highly sensitive to rising U.S.
interest rates as they lift the opportunity cost of holding
non-yielding assets, fell 0.4 percent to just below $1,158 an
(Additional reporting by John Geddie, Patrick Graham and Atul
Prakash in London; Editing by Andrew Roche)