* World shares inch up as markets wind down for holidays
* Wall Street seen opening up 0.4 percent
* Chinese money rates swing higher amid liquidity squeeze
* Currencies mostly steady though Thai baht slumps on
* Gold stabilises around $1,200 an ounce
By Marc Jones
LONDON, Dec 23 Signs of improving U.S. economic
growth helped ease stock markets into holiday mode on Monday,
though a credit squeeze in China and gold facing its worst year
in over two decades took the edge off gains.
Trading was thin, and with many investors gearing up for
Christmas and with Tokyo on holiday, Wall Street was expected to
add around 0.4 percent to Friday's all-time high finish.
European markets were also seeing some last-minute festive
buying, with London's FTSE and Frankfurt's Dax
0.5 higher ahead of the U.S. restart and Portuguese shares
up a bumper 1.8 percent.
Sentiment globally was underpinned by upbeat U.S. GDP data
and the resilience of stocks to the Federal Reserve's decision
last week to start scaling back its bond-buying stimulus.
"Growth is picking up," International Monetary Fund head
Christine Lagarde said on NBC. "And unemployment is going down.
So all of that gives us a much stronger outlook for 2014, which
brings us to raising our (U.S.) forecast."
The Dax's gain in Germany meant it too was heading into
Christmas at an all-time high. It has risen almost 25 percent
this year and analysts are eyeing more in 2014 if its powerhouse
economy performs as expected.
It wasn't all festive cheer, however. China's benchmark
short-term money rates reached a near six-month high of 9.8
percent at one stage in Asia as its credit squeeze
Rapid credit growth in the world's second-biggest economy
has worried Chinese authorities, who fear rising debt levels are
fuelling asset bubbles.
The People's Bank of China (PBOC) injected more than 300
billion yuan ($49.4 billion) into the interbank market on Friday
in response to rising rates, but hinted that banks had work to
do if they wanted to avoid a cash crunch.
"The PBOC appeared to stress that cash reserves are abundant
in comparison to previous years. But the market has expanded
sharply in recent years and demand in the interbank market has
far exceeded the previous years' levels," said a trader at a
major state-owned commercial bank in Shanghai.
THAILAND TENSE, ITALY UNDER PRESSURE
The combination of the Fed tapering its bond-buying support
and tighter China interest rates could weigh on emerging market
currencies and assets, as it did back in June.
The Indonesian, Malaysian and Thai currencies all came under
pressure last week and even the Korean won lost a little of its
strength. The Thai baht, which also has domestic
political turmoil to contend with, hit its lowest since early
2010 on Monday.
Shanghai stocks, which fell about 8 percent in the last two
weeks, managed to bounce 0.4 percent, lessening the
fallout from its money market tensions across the region.
In the euro zone, Italy was in focus after getting a fresh
warning from the European Central Bank on Sunday that it needed
to keep its public finances in check.
Italian government bonds were vying with Spain
to be the region's weakest performers, and Milan's main stock
market was in positive territory largely on hopes of a
stake sale at one of its most troubled banks.
Weak consumer data also hit sentiment ahead
of a year-end news conference from Prime Minister Enrico Letta.
"Italy is suffering from a dearth of growth but for me it
still seems to be a solid member of the euro zone," said Neil
Williams, chief economist at fund manager Hermes.
"My concern for next year for the euro zone is not so much
the periphery, but what happens with the bill-payers."
In the currency market, the dollar was idling just below
103.90 yen after hitting a five-year high at 104.64 last
week. Dealers cited options barriers at 104.75 and 105.00 as the
next target for bulls.
November personal income and spending data is on tap for
8:30 a.m. (1330 GMT), with both seen rising 0.5 percent. The
final December reading of the Thomson Reuters/University of
Michigan index on consumer sentiment is due at 9:55 a.m.
Analysts expect a reading of 83, up from 82.5 last month.
The euro was firming at $1.3690, but remained well
short of last week's peak of $1.3811. Some heat has been taken
out of the shared currency since then as banks have stocked up
for the sensitive year-end period with extra ECB funding. They
added another 15 billion on Monday.
Among commodities, gold has been getting less precious by
the day due to the winding back of U.S. stimulus and a general
lack of global inflationary pressure.
The metal was pinned below $1,200 on Monday after
carving out a six-month low of $1,187.80 last week. If prices
stay at that level the metal would have shed 28 percent this
year, the largest annual loss in 32 years.
In contrast, oil prices have been supported by a positive
outlook for fuel demand in the United States and reduced Libyan
supply. Brent crude was a fraction lower on Monday at
$111.50 a barrel after gains of almost 3 percent last week.
U.S. oil futures dipped 34 cents to $98.98.