* U.S. stocks expected to open higher
* Oil spikes up on Iran tensions
* German unemployment surprises
By Richard Hubbard
LONDON, Jan 3 Improved economic data from
China and Germany boosted the outlook for the global economy on
Tuesday, sending U.S. stock futures and the euro higher, but
rising tension in the Middle East Gulf pushed crude to around
$110 a barrel.
Global stocks, as measured by the MSCI world equity index
, were up over 0.6 percent after ending 2011 down
Investor attention is focused on the U.S. Institute for
Supply Management (ISM) Index of National Factory Activity for
December due for release at 1500 GMT, with economists in a
Reuters survey expecting a reading of 53.2 versus 52.7 in
"The data we've seen coming from the U.S. has actually
surprised on the upside over the past few weeks and I think
that's going to continue," said Ian Stannard, currency
strategist at Morgan Stanley.
Signs of improved growth in the United States may also cool
any speculation about another round of money-printing by the
Federal Reserve, improving the outlook for the dollar.
The FOMC releases minutes from its Dec. 13 meeting at 1900
ICE Brent crude futures climbed 2.45 percent to a
high of $110.35 a barrel, on the first day of trading for 2012.
U.S. crude futures were up $2.29 at $101.11 a barrel
after hitting an intraday high of $101.68.
Military exercises in the Gulf by Iran and the movement of
U.S. naval vessels in the area has raised fears of a
confrontation between Tehran and Washington that could cut off
oil exports from the region.
Iran has said it could shut the Strait of Hormuz, through
which 40 percent of world oil is shipped, if sanctions were to
be imposed on its crude exports..
Meanwhile the euro and European stocks got a lift from news
that German unemployment fell more than expected in December
with the jobless rate at 6.8 percent, its lowest level since the
unification of Germany two decades ago.
The euro rose 0.7 percent versus the U.S. dollar to a
session high of $1.302, boosted by the better-than-expected
economic data that is fuelling demand for perceived riskier
currencies and has triggered a short-covering rally.
It was above a 15-month low of $1.2858 hit last week
although persistent worries about the region's on-going debt
crisis and the scale of the first quarter borrowing needed to
refinance maturing debt is expected to cap any gains and hit
demand for the region's lower-rated sovereign debt.
"The maturing of debt is going to give investors the
opportunity to take some of those funds back out of Europe, to
repatriate some of those funds to reduce their exposure," said
Morgan Stanley's Stannard.
Currency speculators boosted bets against the euro to a
record high in the last week of December and built up the
biggest long dollar position since mid-2010, data from the
Commodity Futures Trading Commission showed on Friday.
A surprisingly strong rise in the purchasing managers' index
for China and a slight improvement in the euro zone PMI
have encouraged risk appetite, especially in
China's official Purchasing Managers' Index rose to 50.3 in
December from 49 in November - moving above the 50 mark which
separates expansion from contraction.
Data on Tuesday also showed the official Purchasing
Managers' Index for non-manufacturing sectors had rebounded
strongly in December to 56.0 from 49.7 in
British manufacturing joined the trend, beating expectations
in December and stabilising after a two-month decline as orders
from China and Germany picked up, data showed.
But over the fourth quarter as a whole the UK PMI reading
suggested the sector registered its worst performance since the
second quarter of 2009, when Britain was mired in recession.
The improvement in the PMIs encouraged European stocks to a
fourth consecutive session of gains. The FTSEurofirst 300
index of top European shares was up 0.5 percent at
1017.03 points after rising as high as 1,022.85, its highest
level in more than two months.
The heavily commodity-weighted UK FTSE 100 index
was up 1.2 percent, lifted by strong gains in mining companies
Xstrata and Kazakhmys, both up around 4 percent.
Commodity currencies have also seen a boost with the
Australian dollar up over 1 percent versus the greenback to
Spot gold was up around 1.6 percent at $1,590.30 an
ounce, also helped by investors renewed appetite for riskier
Copper hit a three-week high, lifted by fund allocations at
the start of the year and by the news of an expansion in China's
manufacturing activity, which boosted hopes that demand for
industrial metals will increase.
Three-month copper on the London Metal Exchange CMCU3 rose
about 0.9 percent to $7,673.25 a tonne.