* European indexes fall 0.3 pct
* U.S. stocks poised to open higher ahead of FOMC minutes
* Dollar gains vs yen as Japan heads towards early election
* Italy and Germany both enjoy strong debt sales
By Richard Hubbard
LONDON, Nov 14 World markets were little changed
on Wednesday as investors waited to see if there would be
progress in approving an aid payment for Greece and in
addressing the U.S. fiscal cliff.
A wave of strikes across Europe to protest against spending
cuts and tax hikes kept the focus on the region's debt
"A quick solution for the U.S. fiscal cliff doesn't seem to
be on the cards and (there are) ongoing worries about Greece and
renewed concern about Spain," said Zeg Choudry, head of equities
trading at Northland Capital.
The MSCI world equity index was ultimately
little changed around 321.90 points after five days of losses,
as falls across Europe were offset by a 0.4 percent rise in Asia
as markets there recovered from seven-week lows.
U.S. stock index futures pointed to an early rebound on Wall
Street where the release of minutes from the last Federal Open
Market Committee meeting later is likely to confirm an easy
policy bias for some time to come.
But in Europe investors were unable to shake off concerns
about a rekindling of the debt crisis, sending the FTSEurofirst
300 index of top European shares down nearly 0.5
percent by the midsession to 1,093.87 points, erasing all of
Tuesday's 0.4 percent rise.
"The failure to sustain any momentum to the upside suggests
there is a buyers' strike and they are staying on the sidelines,
waiting for a resolution either in Greece or in the U.S.," Ioan
Smith, strategist at Knight Capital said.
London's FTSE 100, Frankfurt's DAX and
Paris's CAC-40 were between 0.4 and 0.6 percent
Although Greece is now expected to secure short-term funding
to meet its debt obligations, international lenders disagree
over how Athens can cuts its borrowings to more sustainable
levels, and a deal to release aid payments remains some way off.
The concerns over Greece, as well as lingering uncertainty
over whether Spain will seek a bailout and the prospect of slow
economic growth across the 17-member euro area also boosted
demand at a German debt auction.
Triple-A rated Germany sold 4.3 billion euros ($5.5
billion)of two-year bonds that paid no interest, meaning Berlin
was able to borrow for free because investors prize the
country's strong fiscal position and highly liquid debt market.
"It's a combination of worries about the euro land economy
plus ongoing fiscal concerns in Greece keeping the short end of
the German curve underpinned," said Nick Stamenkovic, strategist
at RIA Capital Markets in London.
Italy's borrowing costs also fell at a 3.5 billion euro sale
of new three-year government bonds, which completed its funding
needs for the year.
While Italy's bonds are considered risky because of its
high debt levels and weak economic outlook, borrowing costs have
been coming down due to the European Central Bank's promise of
support for nation's struggling to fund themselves.
"Demand was solid, and the yield on the three-year note
resumed its downward trend and is at pre-crisis levels,"
Nicholas Spiro, managing director at Spiro Sovereign Strategy.
The euro meanwhile gained against both the dollar and the
yen after Japan's Prime Minister Yoshihiko Noda said he was set
to dissolve parliament's lower house on Friday for a snap
election next month, which is likely to cost him his job,
Opinion polls show Noda's Democratic Party of Japan (DPJ)
heading for a drubbing in the vote, which government and senior
party members have said would be held on Dec. 16.
That outcome is regarded as negative for the yen as the main
opposition Liberal Democratic Party (LDP) favours further
monetary policy easing by the Bank of Japan.
The dollar rose 0.9 percent to 80.12 yen and the euro
climbed 1.2 percent on the day to 102.10 yen. Against
the dollar, the euro was 0.25 percent higher at $1.2730.
The greenback was easier against most major currencies other
than the yen on growing signs that the Federal Reserve was
likely to adopt an ultra-loose monetary stance in coming months.
Influential Fed Vice Chair Janet Yellen said on Tuesday that
U.S. interest rates may need to stay near zero until early 2016
to forcefully lift employment.
However, any weakness was still being capped by concerns
that Washington will fail to find compromises needed to avoid a
series of mandated tax hikes and spending cuts due to take
effect next year that could send the world's largest economy
back into recession.
U.S. Treasury yields edged higher in Europe on Wednesday but
were not expected to stray far from their lowest levels since
September on concerns over the outcome of negotiations.
"The negotiations will be tough and could trigger a
downgrade of the U.S. credit rating," said Efigest Asset
Management portfolio manager Regis Yancovici.
Ten-year Treasury yields were up two basis
points in European trade at 1.61 percent, having fallen as low
as 1.57 percent on Tuesday.
Moves in commodity markets were limited, with traders
watching developments in Europe and the United States and also
wary about the ramifications of the political transition in
China due to be announced on Thursday.
On Wednesday, the 2,270 carefully vetted party delegates
cast their votes in Beijing's Great Hall of the People for the
new central committee, which in turn will appoint the Politburo
Standing Committee that will ultimately rule China.
The new government's attitude to supporting growth, which
has been slowing all year, will be closely watched as China is
the world's top consumer of many commodities.
Three-month copper on the London Metal Exchange was
down 0.4 percent at $7,646 a tonne, while gold fell 0.1
percent to $1,722.91 an ounce, still below a 3-week peak of
around $1,738 struck on Friday.
In oil markets Brent crude reversed early losses to
gain 54 cents to $108.80 a barrel, supported by the dollar's
fall against a basket of currencies, aside from the yen, which
makes dollar-denominated oil more affordable.
U.S. oil gained 34 cents to $85.72, snapping two days