GLOBAL MARKETS-Global stocks rise ahead of Fed meeting

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Ritvik Carvalho
LONDON, March 16 (Reuters) - Global stocks hit their highest
levels in over three weeks on Tuesday, as investors bet the U.S.
Federal Reserve and other central banks meeting this week will
keep policies accommodative to help drive a post-pandemic global
economic recovery.
European shares extended a rally that began on Wall Street
on Monday and continued into Asia, with the pan-region STOXX 600
index .STOXX up 0.6% by midday in London. On Monday, the index
.STOXX touched its highest in more than a year. .EU
Britain's FTSE 100 index rose 0.9%, hitting its highest in
nearly 2 months. Germany's DAX .GDAXI gained 0.6%, France's
CAC 40 .FCHI 0.2% and Italy's FTSE MIB .FTSEMIB 0.6%.
E-mini futures for the S&P 500 ESc1 hit a record high,
gaining 0.1%.
MSCI's All Country World Index, which tracks stocks across
49 countries, rose 0.3% to its highest since Feb. 22.
.MIWD00000PUS
"The stock markets have kept their spirits up ahead of
tomorrow's important Fed announcement," said Karl Steiner, chief
quantitative strategist at SEB.
An index of Asia-Pacific share markets excluding Japan
.MIAPJ0000PUS gained 0.65%, led by a 0.8% jump in Australia's
benchmark S&P/ASX 200 index .AXJO .
Japan's Nikkei 225 .N225 gained 0.5% to just below the
30,000 mark. The broader Topix .TPX added 0.65%.
China's blue-chip CSI 300 index .CSI300 climbed 0.87% and
Hong Kong's Hang Seng .HSI gained 0.67%.
On Monday, the S&P 500 and Dow Jones Industrial Average both
soared on gains in travel stocks as mass vaccinations in the
United States and congressional approval of a $1.9 trillion aid
bill fueled investor optimism.
Longer-term U.S. Treasury yields slipped further on Tuesday,
as the market looked ahead to government debt auctions and the
Fed's two-day policy meeting, which will conclude on Wednesday.
The benchmark 10-year yield US10YT=RR , which reached a
more than one-year high of 1.642% last week, was back at
1.6004%.
The earlier surge in yields stemmed from investors
speculating that rising inflation expectations could prompt the
Federal Open Market Committee to signal it will start raising
rates sooner than expected.
"We think the FOMC will have a hard time expressing concern
about asset markets with the S&P at an all-time high on 12
March, despite 10Y U.S. Treasury yields at post-February 2020
highs," said analysts Steve Englander and John Davies at
Standard Chartered.
"Focus has been on the FOMC ‘dot plot' in recent days, but
if the FOMC and Fed Chair (Jerome) Powell do not push back
against current yield levels, investors are likely to take
yields higher as better data arrives," they added, referring to
the Fed's diagram showing interest rate expectations of its
policymakers.
Fed policymakers are expected to forecast the U.S. economy
will grow in 2021 by the fastest rate in decades, as it recovers
from a coronavirus-stricken 2020. The Bank of England also meets this week on Thursday and the
Bank of Japan wraps up a two-day meeting on Friday.
On Wall Street, the Dow Jones Industrial Average .DJI rose
174.82 points, or 0.53%, to 32,953.46, the S&P 500 .SPX gained
25.6 points, or 0.65%, to 3,968.94 and the Nasdaq Composite
.IXIC remained unchanged. Airline shares .SPCOMAIR rose as the companies pointed to
concrete signs of an industry recovery as vaccine rollouts help
spur leisure bookings. The outlook for post-pandemic recoveries continued to
diverge between the United States and Europe.
President Joe Biden's order to make vaccinations available
to all adults by May 1 contrasted with stuttering rollouts in
Germany, France and elsewhere, where use of the AstraZeneca (NASDAQ:AZN)
AZN.L vaccine has been suspended amid concern over possible
side effects.
However, Kyle Rodda, an analyst at IG Markets, said the
prospect of a slower economic recovery in Europe didn't appear
to be a major handicap for investors.
"It doesn't seem to be the view that this is a real risk,"
he said. "Investors are wary, but not worried."
In currencies, the U.S. dollar held small gains from
overnight, with caution evident ahead of the central bank
meetings.
The dollar was largely flat at 109.06 yen JPY= , after
rising as high as 109.365 on Monday for the first time since
June.
The euro EUR= was little changed at $1.1946, holding for
an eighth session below the $1.20 level.
Bitcoin BTC=BTSP slid 0.5% to $55,354.48. The
cryptocurrency hit $61,781.83 on Saturday.
U.S. West Texas Intermediate crude CLc1 for April changed
hands at $64.51 a barrel, down 1.3%. Brent crude futures LCOc1
for May stood at $67.88 a barrel, losing 1.34%.

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Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
Federal Open Market Committee Projections https://tmsnrt.rs/3eJVKCI
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