* 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
* Dow eyes another crack at 20,000 after 15 pct jump in 2016
By Marc Jones
LONDON, Dec 28 The dollar, oil and world stocks
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 0.5 percent as it played catch-up after similar
run-ups in Germany and France and as Wall
Street's Dow Jones index eyed another crack at 20,000
The dollar also drove higher after U.S. consumer
confidence shot to its loftiest 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
0.2 percent to 117.65 yen. It was up a similar amount
against the euro and sterling at $1.0390 per euro and $1.2213 to
"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
Oil has surged more than 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 gain of 1.7 percent.
In a sign that the world's major oil producers may abide by
their output agreement, Iraqi Oil Minister Jabar Ali al-Luaibi
said on Wednesday his country, which has seen fast production
growth in the past two years, would cut supply by between
200,000 and 210,000 barrels per day from January.
Gazprom Neft also said it planned to boost oil
output by less than it had intended before Russia joined the
deal to cut supply.
Helped by the broadly robust tone to stock and commodity
markets, the Australian dollar firmed.
Australian stocks gained 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 straight years of
With the dollar and bond yields on the rise again and
China's yuan on the slide, investors are wondering whether the
rally could falter.
Data from Morgan Stanley showed EM equity funds logged
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.
It said the cumulative drop in equity funds over the last
eight weeks totalled $11.1 billion.
Gold dipped though 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 a 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
($1 = 6.9541 Chinese yuan)
(Reporting by Marc Jones; Editing by John Stonestreet and Dale