* Global equities rise alongside commodities
* Euro at 15-month peak on EU rate hike optimism
* Dollar pressured as U.S. government shutdown looms
* Oil at 32-month high, gold notches another record high
(Updates to Wall Street open, adds details, quote, changes
byline, previous LONDON)
By Leah Schnurr
NEW YORK, April 8 (Reuters) - World shares hit their
highest level in almost three years on Friday, while heightened
expectations of more interest rate hikes in the euro zone
propelled the euro to a 15-month peak versus the dollar.
Gains in commodities such as oil and gold were driven by
expectations of stronger demand and the threat of supply
shortages, in some cases. Wall Street opened higher as shares
of resource companies rose.
The greenback was also pressured as the prospect of a U.S.
government shutdown loomed and U.S. 10-year Treasury yields
rose near six-week highs.
Boosted by Thursday's European Central Bank rate hike, the
euro rose to its highest since January 2010.
The euro was last up 0.8 percent at $1.4413 <EUR=>.
The ECB's move to raise its key interest rate to 1.25
percent has widened the euro zone's yield advantage over the
United States, Britain and Japan, where interest rates remain
at record lows. For details, see []
ECP President Jean-Claude Trichet said policymakers were
ready to tighten further if needed. But he stressed the ECB had
not decided that Thursday's move was the first in a series of
moves. []
"Trichet's press conference was neutral and suggests to us
that the bank is embarking on a gradual series of rate
increases of perhaps 25 basis points per quarter," said Jon
Wetreich, currency strategist at Brown Brothers Harriman.
Stronger-than-expected German trade data helped underscore
the health of the euro zone's largest economy, helping
investors sidestep resurgent doubts over the resilience of the
single currency zone following Portugal's request this week for
aid to cope with its debt. []
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ECB in graphics: http://r.reuters.com/kah88r
BOJ versus Fed assets: http://link.reuters.com/saq88r
Select interest rates: http://link.reuters.com/vug88r
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SHUTDOWN LOOMS
Brent crude <LCOc1> rose past $125 per barrel to a
32-month high after attacks on Libyan oil fields and postponed
elections in Nigeria. Commodities broadly rose on optimism the
global economic recovery will fuel demand.
Spot gold <XAU=> hit another record high and silver <XAG=>
climbed past the $40 an ounce level for the first time since
1980.
Mining shares led European stock gains and the FTSEurofirst
300 index <> rose 0.4 percent. The MSCI main world equity
index <.MIWD00000PUS> rose 0.7 percent to its highest level
since July 2008 and on track for its third consecutive weekly
gain.
The Dow Jones industrial average <> gained 22.41
points, or 0.18 percent, to 12,431.90. The Standard & Poor's
500 Index <.SPX> rose 3.99 points, or 0.30 percent, to
1,337.50. The Nasdaq Composite Index <> was up 8.48
points, or 0.30 percent, at 2,804.62.
In Washington, the White House and Congress worked
furiously to break a U.S. budget deadlock and avoid a federal
government shutdown, after President Barack Obama and
congressional leaders failed to reach a deal in late-night
talks. []
"With all the focus recently on debt problems in the euro
zone periphery, what is going on in the U.S. highlights that
the U.S. has budget problems of its own, while the euro
continues to be driven by the prospect of more rate hikes."
(Additional reporting by Nick Olivari in New York and
Sebastian Tong in London; Editing by Padraic Cassidy)
