GLOBAL MARKETS-Shares scale 22-month peak as focus turns to growth

* MSCI world index climbs to highest since Jan 2018
* Euro STOXX 600 hits highest since July 2015
* Trade sensitive auto sector gains
* Wall Street futures up 0.3%
* 2020 growth in focus -investors
* Investors undeterred by lack of news on trade
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates prices throughout, adds China central bank)
By Tom Wilson
LONDON, Nov 19 (Reuters) - World shares touched their
highest in nearly two years on Tuesday on predictions of future
growth and bets the United States and China can end their
damaging trade war.
The world's two largest economies are in talks on an initial
deal to end an 18-month trade dispute that has damaged supply
chains and upset global markets, with Washington due to impose a
new round of tariffs on Chinese goods from Dec. 15.
A lack of clear news on the progress of talks has not
deterred investors emboldened by a growing sense that the risks
of a global recession have receded.
Looser monetary policy from major central banks such as
China have also given investors further cause to focus on
equities.
European shares climbed through the morning, with the broad
Euro STOXX 600 .STOXX adding 0.6% to move to its highest since
July 2015. Indexes in Frankfurt .GDAXI and London .FTSE
gained 1% and 1.2% respectively.
Automakers .SXAP , sensitive to both trade and growth,
climbed 1.2% on robust demand in Germany and France, with
Volkswagen VOWG_p.DE jumping 1.9%. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, gained 0.2% to reach its highest since
January last year. It is away from a record high.
Wall Street futures ESc1 indicated a positive start, too,
adding 0.3%.
Investors said assumptions that an initial trade deal would
be reached outweighed any creeping doubts that a lack of clear
news on the talks suggested a lack of progress.
A CNBC report overnight that Beijing was pessimistic about
prospects of a deal had buffeted the dollar. But that was
balanced by signs of detente, with Washington granting an
extension to let U.S. companies keep doing business with Chinese
telecoms giant Huawei. CHINA CREDIT
Unfazed by the lack of clarity on trade, markets focused on
a growing sense of positive economic fundamentals ahead.
Reflecting that growing bullishness, banks and asset
managers have upgraded their outlooks for some equity sectors
and regions for next year.
"Consensus is assuming that there will be a cyclical
upturn," Stéphane Barbier de la Serre, a strategist at Makor
Capital Markets. "It's like the market lowered its guard on the
big risk metrics -- and that has triggered a reweighting of
funds from bonds to equities."
Loose central bank monetary policy also gave further reasons
to be cheerful.
Following its surprise cut on Monday to a closely watched
lending rate, China's central bank said it will step up credit
support to the economy and push real lending rates lower - a
move that could boost banks' ability to increase lending and
stoke consumption. The ripples from easier credit and higher domestic demand in
China would likely be felt through supply chains in Asia, said
Tim Drayson, head of economics at Legal & General Investment
Management.
"We are seeing signs that credit is becoming available to
buy property and consumer durables, and that's a positive," he
said.
Australia's central bank was among those also open to
cutting rates. The Reserve Bank of Australia "agreed a case
could be made" for another cut due to weakness in wages growth
and inflation, minutes from a November meeting showed.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.7%, with Shanghai blue chips .CSI300
gaining 1% and Hong Kong's Hang Seng .HSI up 1.4%.

DOLLAR STABILISES
In currencies, the dollar stabilised after three consecutive
days of losses, with investors awaiting the release of the
minutes of the U.S. central bank meeting at end-October when
policymakers had cut interest rates.
The dollar index .DXY against six major currencies gained
0.1% to 97.868, close to a two-week low after weakening 0.6% in
the last three days.
"Trade headlines are dominating sentiment but in terms of
the key event risk, the release of the Fed minutes will be a big
one for market participants," said Morten Lund, a senior FX
strategist at Nordea.
The British pound GBP= slipped 0.1% to $1.2933 after
hitting a one-month high overnight as polls showed Prime
Minister Boris Johnson's Conservative Party on course for
victory at the Dec. 12 election.
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