* World shares close to peaks, bond yields creep higher
* ADP report fuels hopes for upbeat non-farm payrolls
* ECB keeps rates at record low, Draghi expected to stay
By Marc Jones
LONDON, July 3 World shares were hovering around
record highs on Thursday as markets waited for two major events
- the European Central Bank fleshing out its latest easing plans
and U.S. jobs data.
The ECB kept euro zone interest rates at an all-time low
0.25 percent, a fully expected decision after last month's
aggressive moves, leaving markets to focus on the 1230 GMT U.S.
jobs data and Mario Draghi's ECB news conference.
Investors were subdued before the two events, both usually
big market movers. Stocks edged higher along with Spanish and
Italian bonds while the euro barely budged against a slightly
The ECB is expected to detail last month's aggressive easing
plans, and forecasts are for non-farm payrolls to rise by more
than 200,000 for a fifth straight month, bolstering the view the
world's largest economy is back on track after a difficult
"The main thing today will be the non-farm payrolls," said
Valentijn van Nieuwenhuijzen, the head of multi-asset funds at
ING investment management."
"(President Mario) Draghi will be doing his best to make the
ECB meeting a non-event, but after all the strong U.S. data this
week, the ADP, ISM, the car sales data, (payrolls) could be the
thing that finally convinces markets that they can't ignore it
European stocks climbed 0.4 percent, heading for
their third consecutive day of gains and keeping MSCI's All
World index, which covers 45 countries, flush
with Wednesday's latest record high.
The dollar was also up, copper on the London Metal Exchange
hit its highest level since late February, and
safe-haven gold was down amid a lull in tensions in Iraq and
DOLLAR, TREASURIES NUDGE HIGHER
The euro was hovering just below a six-week high at $1.3648
as German Bund yields nosed higher. The euro's strength is
becoming a major thorn in the ECB's side, creating problems of
low inflation and growth.
Sweden's crown fell to a 3-1/2-year low against the euro as
its central bank cut rates more than expected.
The Australian dollar lost ground after the head of the RBA
warned the currency may weaken.
The dollar held firm above a recent eight-week low as
benchmark 10-year U.S. treasury yields crept to a new 1 1/2-week
high of 2.62 percent.
Early futures prices also pointed 8to minor gains on
Wall Street later.
The U.S. jobs data is being released on Thursday because
U.S. markets are closed for Independence Day on Friday, the day
the report is usually released. It is due at 1230 GMT. The ECB's
press conference ia also scheduled for 1230 GMT.
Asian equity markets saw little activity overnight, with
MSCI's broadest index of Asia-Pacific shares outside Japan
ending steady after briefly touching a new
"If the (payrolls) data shows that the U.S. economy is in
good health, Japanese shares in the auto and technology sector
will likely be bought," said Hikaru Sato, a senior technical
analyst at Daiwa Securities in Tokyo.
In commodities, crude oil extended losses after falling the
previous day on encouraging signs of supply from Libya and Iraq.
Libya's acting prime minister Abdullah al-Thinni said the
government had reached a deal with a rebel leader controlling
oil ports to hand over a final two terminals that should end a
Iraqi Prime Minister Nuri al-Maliki also boosted supply
hopes as he said parliament could form a new government in its
next session after the first collapsed in discord.
Baghdad can ill afford a long delay as large swathes of the
north and west fall under the control of an al Qaeda splinter
Brent crude was back below $110.50 for the first
time in over two-weeks while safe-haven gold fell 0.3
percent to $1,323.55 an ounce as it pulled back from a 3-month
(Reporting by Marc Jones, editing by John Stonestreet/Ruth