* World shares firm as Fed expected to delay stimulus taper
* European shares at five-year highs, Asian markets gain
* Dollar index steady near 8-month low, gains on yen
* Tuesday's Sept U.S. jobs report eyed
* Gold near 1-1/2-week peak after best week since Aug
By Richard Hubbard
LONDON, Oct 21 Global shares held at five-year
highs on Monday as markets awaited a backlog of U.S. economic
data that could give further clues on when the Federal Reserve
might start scaling down its stimulus programme.
September's non-farm payrolls report due on Tuesday, is seen
as particularly important and some investors were positioning
for a strong reading, pushing the dollar up against the
safe-haven yen and Swiss franc.
Many in the markets think the Fed will delay trimming its
$85 billion-a-month bond-buying programme, which has supported
riskier assets like shares, until the economic impact of this
month's partial U.S. government shutdown becomes clearer.
However, the prospect that the deluge of data due to emerge
from reopened government agencies - including the jobs report
and retail sales and factory output data for September - could
influence that outlook has convinced many to hold their fire.
If the non-farm payrolls report beats forecasts, it could
renew the debate over whether the Fed would still taper this
year or not, injecting volatility into the markets.
"If the jobs number beats expectations and is backed up by
good retail sales and durable goods data, we could see some
speculation of Fed tapering return," said Ian Gunner, portfolio
manager at Altana Hard Currency Fund.
Economists polled by Reuters expect jobs growth of around
180,000 and an unemployment rate of 7.3 percent.
The dollar was up 0.4 percent against the lower-yielding
Japanese currency to 98.07 yen, leaving it closer to a
three-week high of 99.01 yen set last Thursday.
It was virtually unchanged against a basket of major
currencies though at 79.69, not far from an eight-month
low of 79.478 touched on Friday.
U.S. stock index futures signaled some early gains for Wall
Street, though investors were likely to be cautious after the
broad S&P 500 index set a new record high on Friday and
the tech-heavy Nasdaq index reached its best level
MSCI's world equity index, which tracks
shares in 45 countries, hovered at the five-year high reached
last week after a last-minute deal to temporarily end the U.S.
budget standoff pushed back the threat of an unprecedented debt
default and sparked a widespread relief rally.
European shares briefly touched a fresh five-year
high before also settling at largely unchanged levels, with a
batch of strong earnings reports adding to the market's solid
Although the European third-quarter results season is less
than a tenth of the way through, early reports have revealed
earnings on average running at 3.3 percent above forecasts, in
contrast to a broadly in-line performance in the United States,
according to Thomson Reuters StarMine.
"Unless the macro data suddenly turns negative I don't see
the risk of a major drawdown in equities," said Peter Garnry,
equity strategist at Saxo Bank.
Consumer appliance and healthcare giant Philips was
the main standout on Monday, tripling its quarterly net profit
after emerging from a long period of product rationalisation and
investment in emerging markets. The results sent its shares
surging more than 6 percent.
Asian shares outside Japan earlier posted a
0.2 percent rise to reach a five-month high. While Australia's
S&P/ASX 200 hit a five-year peak, helped by last week's
strong data from China - Australia's biggest export market.
The prospect of the Fed delaying any decision on tapering
until next year, if bolstered by this week's data, was seen as
favouring higher-yielding currencies like the Australian and
Canadian dollars, and other riskier assets like commodities.
"We're going to see over the coming weeks quite a positive
environment, more of a risk-on environment, starting to
develop," said Ian Stannard, head of European foreign exchange
strategy for Morgan Stanley.
But after last week's sharp price moves, investors in these
markets were also cautious.
Gold was flat at $1,315.30 an ounce having climbed
nearly 4 percent last week to record its biggest weekly rise in
Brent crude oil even dipped slightly below $110 a barrel
as investors waited for the resumption of U.S. oil data
along with the other economic numbers.
The U.S. Energy Information Administration was due to
release weekly oil data for the week ended Oct. 11 later on
Monday. Its normal release schedule will resume after that, and
oil data for last week will be released on Wednesday.
"The market's just in a wait-and-see mode ... The thing on
most traders' minds is what sort of story is going to be told by
the U.S. data now that it's going to be released again," said
Ric Spooner, chief market analyst at CMC Markets.