* Dollar firm after upbeat U.S. consumer confidence data
* Yield gap between U.S. Treasuries, Bunds at record high
* Crude oil holds gains, copper, iron ore buoyant
* London's FTSE plays catch-up as euro bourses drift
By Marc Jones
LONDON, Dec 28 The dollar, oil and world stocks
all rose on Wednesday following upbeat U.S. data that saw the
gap between Treasuries and other benchmark global government
bonds hit new highs.
Europe's main stock market, London's FTSE, reopened
with a gain of 0.25 percent as it played catch-up after similar
run-ups in Germany and France the previous day
and by Wall Street and Asia overnight.
The dollar also edged higher after U.S. consumer
confidence shot to its highest in more than 15 years in December
on hopes that President-elect Donald Trump will nurture further
improvements in the world's biggest economy.
Having already jumped 16 percent against the Japanese
currency since the U.S. election, the greenback gained a further
0.15 percent to 117.61 yen. It was up a similar amount
against the euro and sterling too at $1.04 per euro and at
$1.2235 to the pound.
"Everything is broadly dollar supportive," said Societe
Generale's head of currency strategy Kit Juckes."
"We have come back from Christmas with some good U.S. data,
(U.S.) bond yields are at the top end of their recent range, oil
is edging higher and the Dow is flirting with 20,000 points."
Euro zone bond yields fell across the board as concerns
about the strength of a rescue plan for Italian banks
and normal year-end caution pushed investors to the
safety of government debt.
Germany's 10-year yields hit their lowest in
seven weeks at 0.18 percent. That in turn widened the yield gap
to U.S. Treasuries, which act as the world's benchmark borrowing
rate, to a record high of 237 basis points.
Oil prices - the other major market driver in recent weeks -
climbed back towards a 1-1/2 year high as promised output cuts
It has surged over 50 percent this year despite plunging to
a 12-year low in January. Brent was at $56.50 a
barrel and U.S. crude at $54.25 after an
overnight surge of 1.7 percent.
In a sign that the world's oil major producers may abide by
their output agreement, OPEC member Venezuela said it will cut
95,000 bpd of oil production in the New Year.
Gazprom Neft said it planned to boost oil output
by less than it had intended before Russia, one of the non-OPEC
member countries, joined the deal to cut supply.
Helped by the broadly robust tone to stock and commodity
markets. the Australian and New Zealand dollars both firmed.
Australian stocks rode the rise to gain 1 percent.
Indonesian shares added 1.9 percent, while Japan's
Nikkei rose 0.1 percent.
Shanghai dipped 0.3 percent to continue a dire 2016.
It has slumped the best part of 18 percent this year having been
a star performer in 2015, dampening an otherwise strong rebound
in emerging markets after three years of straight losses.
With the dollar and bond yields on the rise again and
China's yuan on the slide, investors though are wondering
whether the rally could falter.
Data from Morgan Stanley showed EM equity funds suffered
weekly outflows of $3.35 billion, the second largest of the
year, while EM bond funds saw outflows of $800 million which
made it seven straight weeks of outflows running.
It said the cumulative drop over the last eight weeks
totalled $11.1 billion.
Firmer oil prices and the upbeat U.S. data continued to
support the wider commodity market. Copper on the London Metal
Exchange was up 1 percent at $5,513 per tonne as trading
resumed after the Christmas holidays.
Iron ore on the Dalian Commodity Exchange extended
gains after breaking a nine-day slump the previous day.
It was up 3.5 percent at 569.0 yuan ($81.82) per tonne and
has now risen about 170 percent this year, boosted by
expectations of Chinese stimulus and hopes that the incoming
Trump Administration will increase U.S. infrastructure spending.
"There is strong positive sentiment on the outlook for these
industrial metals going into 2017," said a Perth-based
commodities trader. "Let's see if this carries in to the main
LME session later on."
($1 = 6.9541 Chinese yuan)
(Reporting by Marc Jones; editing by John Stonestreet)