 "Global stocks creep up amid Fed limbo, dollar dips")
World shares crept up on Tuesday while the dollar lost ground as investors awaited further clues on whether the Federal Reserve will raise US interest rates this year.
European equities were 0.5 per cent higher led by mining and banking stocks after data that pointed to a gradual improvement in the region's economy. The euro also posted gains.
Early encouragement came from France where surprisingly upbeat PMI figures showed the private sector growing at its fastest pace in 10 months, and in Denmark where consumer confidence jumped.
Germany's PMI reading also reassured, as a combined manufacturing and services sector survey came in comfortably above the line that separates growth from contraction.
"The German economy is continuing its uninterrupted upward trend in August," Markit Economist Oliver Kolodseike said.
In forex markets, the dollar was the central focus as it slipped 0.25 per cent to 94.286 against a basket of currencies. The index fell about 1.3 per cent last week on what traders perceived as mixed signals from Fed officials.
The focus now is on a speech Fed Chair Janet Yellen is due to give at the annual central bank symposium in Jackson Hole on Friday. Investors still doubt the stars will align for a hike anytime soon, so a hawkish tone from Yellen would challenge that view.
The dollar drifted as low as 99.91 yen in early European trade and then spent much of the session hovering just above the 100 yen barrier.
The euro was 0.3 per cent firmer at $1.1345.
New Zealand's dollar was up three-quarters of a cent at $0.7323 after the country's central bank forecast another 35 basis points in possible rate cuts, less than many investors had wagered on.
"The (US) dollar is weakening... due to the general anticipation around Jackson Hole on Friday," said Saxo bank's head of FX strategy John Hardy.
"There is also a general reach for yield happening. That was one of the things we saw with (New Zealand central bank governor) Wheeler waving the white flag and saying that he is not going to use easing to try and weaken the currency."
OIL GIVES GROUND
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent in slow trade overnight.
South Korea, Australia and Shanghai all gained, while Japan's Nikkei went the other way, easing 0.6 per cent as the yen ground higher on the dollar.
A survey of Japanese manufacturing activity for August showed output rose for the first time in six months, but the improvement was marginal and investors fixed their focus on the Fed instead.
"The market does seem to be reluctantly acknowledging the chorus of senior Fed speakers who have suggested recently that a 2016 rate hike is still quite probable and September is 'live'," wrote analysts at ANZ in a note.
"But in reality, the response has been very muted."
Indeed, 10-year US Treasury yields ticked up to 1.55 per cent after falling 4 basis points overnight. German Bund yields nudged up as well along with the rest of the euro zone and UK Gilts.
Fed fund futures imply around a 24 per cent chance of an easing in September, rising to around 50 per cent by December.
A quarter-point hike is not fully priced in until September 2017.
In commodity markets, oil remained under pressure after shedding three per cent on Monday amid worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising US oil rig count.
Brent crude lost 25 cents to $48.96 a barrel. It hit a two-month high of $51.22 on Friday. US crude futures fell 36 cents to $47.07, after the September contract expired on Monday at $47.05.
Futures markets pointed to Wall Street creeping higher later, having ended little changed on Monday.
Biotech stocks received a boost from Pfizer's $14 billion acquisition of cancer drug maker Medivation, which jumped nearly 20 per cent.
The first August US PMI surveys are also due later.
