* Graphic: FX rates in 2017 tmsnrt.rs/2egbfVh
* Europe stocks flat, world shares set for 4th month of
* Trump flags big infrastructure spend before Tuesday speech
* Oil futures firm, gold retreats from 3-1/2-month high
By Marc Jones
LONDON, Feb 28 World stocks hovered just off
all-time highs and were on course for a fourth straight month of
gains on Tuesday, as investors awaited a speech by U.S.
President Donald Trump for signals on infrastructure spending
and tax cuts.
Global share markets have gained more than
10 percent since Trump won power in November and investors are
hoping his speech to the U.S. Congress will detail his big
spending promises to voters.
Wall Street was expected to hold at a record high
when it reopens, while some upbeat company earnings helped
Europe steady as it looked to pull out of a three-day dip and
consolidate a 2.5 percent gain for the month.
In the currency markets, the dollar, which has not
taken to the Trump trade quite so enthusiastically, was treading
water against most of its major peers, with the only notable
move a dip against the yen to 112.41.
Gold was also steady, having hit a 3-1/2 month high
on Monday and 10-year U.S. Treasury yields hovered
at about 2.36 pct, some 10 basis points down on where they
started the year.
That suggests that bond investors at least are not fully
convinced about the chances of a substantial pick-up in U.S.
growth and higher interest rates.
"While markets no doubt appear to like what they are
hearing, the president now needs to deliver. He's talked the
talk and he now needs to walk the walk," CMC markets chief
strategist Michael Hewson said.
Trump met U.S. state governors at the White House on Monday
and said he sees "big" infrastructure spending and that he is
seeking a "historic" increase in military spending of more than
That means some $54 billion of military spending is now on
the table, though that appears to be funded by cuts elsewhere in
government, which Trump wants to make leaner.
Led by engineering, construction and defence firms, Wall
Street stocks eked out another all-time high, with the Dow Jones
recording its 12th straight record, a winning streak not seen
since 1987, and fed a 5 percent rise for the month.
It looked set to struggle to keep the run going later,
though there is plenty of data likely to stir interest,
including PCE inflation, which the Federal Reserve likes to look
at, as well as updated fourth quarter GDP.
David Kelly, Chief Global Strategist, JP Morgan Asset
Management said Trump's speech later was unlikely to be highly
detailed in terms of policy proposals.
"However, it will be important to see how optimistic the
administration is about the economic outlook and how willing it
is to boost the deficit in an attempt to fulfil the president’s
TIME TO TRIM
In Europe, the economic signals were largely encouraging,
although not universally so.
Sweden's crown rose as its economy showed solid
2.3 percent year-on-year growth and inflation figures were
stronger across central Europe, but British consumer morale
suffered a knock which sent the pound down.
Reuters flagship poll of large global investors showed a
trimming of equities exposure this month, with many arguing that
markets had become too complacent about Trump's policies and the
risks stemming from Europe's election calendar.
Support programmes from the world's big central banks are
also still having an impact.
Germany, which is benefitting from the European Central
Bank's stimulus, sold two-year Schatz bonds at almost minus 1
percent, another record low interest rate that showed investors
are still prepared to pay plenty for the privilege of holding
German government debt.
The euro barely budged on the day at $1.0595, with
February set to be its fourth monthly fall in the last five.
France's bond yields continued to ease, however, as the
recent jitters about its upcoming election stabilised.
In commodity markets, oil edged higher to just over $56 a
barrel, underpinned by high compliance with OPEC's agreed
The organisation has so far surprised the market with its
discipline, which could increase further in coming months as the
biggest laggards - the United Arab Emirates and Iraq - pledge to
catch up quickly with their targets.
"With the prospect of OPEC extending the current cuts even
longer, we would expect to see prices continue to push higher
from here," ANZ analysts said in a note.
Industrial metals such as copper and nickel
were both a touch lower. The latter has surged almost 17 percent
this month while copper is up almost 30 percent since late
A strike at the Escondida copper mine in Chile, the world's
largest, appeared far from ending as the conflict neared its
third week, with the union denying a news report that it had
returned to talks with mine owner BHP Billiton.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Lisa Twaronite in Tokyo; Editing by