GLOBAL MARKETS-World shares firm as markets await US data rush

Reuters

* World shares firm as Fed expected to delay stimulus taper

* European shares at five-year highs, Asian markets gain

* Dollar index steady near 8-month low, gains on yen

* Tuesday's Sept U.S. jobs report eyed

* Gold near 1-1/2-week peak after best week since Aug

By Richard Hubbard

LONDON, Oct 21 (Reuters) - Global shares held at five-yearhighs on Monday as markets awaited a backlog of U.S. economicdata that could give further clues on when the Federal Reservemight start scaling down its stimulus programme.

September's non-farm payrolls report due on Tuesday, is seenas particularly important and some investors were positioningfor a strong reading, pushing the dollar up against thesafe-haven yen and Swiss franc.

Many in the markets think the Fed will delay trimming its$85 billion-a-month bond-buying programme, which has supportedriskier assets like shares, until the economic impact of thismonth's partial U.S. government shutdown becomes clearer.

However, the prospect that the deluge of data due to emergefrom reopened government agencies - including the jobs reportand retail sales and factory output data for September - couldinfluence that outlook has convinced many to hold their fire.

If the non-farm payrolls report beats forecasts, it couldrenew the debate over whether the Fed would still taper thisyear or not, injecting volatility into the markets.

"If the jobs number beats expectations and is backed up bygood retail sales and durable goods data, we could see somespeculation of Fed tapering return," said Ian Gunner, portfoliomanager at Altana Hard Currency Fund.

Economists polled by Reuters expect jobs growth of around180,000 and an unemployment rate of 7.3 percent.

The dollar was up 0.4 percent against the lower-yieldingJapanese currency to 98.07 yen, leaving it closer to athree-week high of 99.01 yen set last Thursday.

It was virtually unchanged against a basket of majorcurrencies though at 79.69, not far from an eight-monthlow of 79.478 touched on Friday.

SHARES FIRM

U.S. stock index futures signaled some early gains for WallStreet, though investors were likely to be cautious after thebroad S&P 500 index set a new record high on Friday andthe tech-heavy Nasdaq index reached its best levelsince 2000.

MSCI's world equity index, which tracksshares in 45 countries, hovered at the five-year high reachedlast week after a last-minute deal to temporarily end the U.S.budget standoff pushed back the threat of an unprecedented debtdefault and sparked a widespread relief rally.

European shares briefly touched a fresh five-yearhigh before also settling at largely unchanged levels, with abatch of strong earnings reports adding to the market's solidfloor.

Although the European third-quarter results season is lessthan a tenth of the way through, early reports have revealedearnings on average running at 3.3 percent above forecasts, incontrast to a broadly in-line performance in the United States,according to Thomson Reuters StarMine.

"Unless the macro data suddenly turns negative I don't seethe risk of a major drawdown in equities," said Peter Garnry,equity strategist at Saxo Bank.

Consumer appliance and healthcare giant Philips wasthe main standout on Monday, tripling its quarterly net profit after emerging from a long period of product rationalisation andinvestment in emerging markets. The results sent its sharessurging more than 6 percent.

Asian shares outside Japan earlier posted a0.2 percent rise to reach a five-month high. While Australia'sS&P/ASX 200 hit a five-year peak, helped by last week'sstrong data from China - Australia's biggest export market.

FED SUPPORT

The prospect of the Fed delaying any decision on taperinguntil next year, if bolstered by this week's data, was seen asfavouring higher-yielding currencies like the Australian andCanadian dollars, and other riskier assets like commodities.

"We're going to see over the coming weeks quite a positiveenvironment, more of a risk-on environment, starting todevelop," said Ian Stannard, head of European foreign exchangestrategy for Morgan Stanley.

But after last week's sharp price moves, investors in thesemarkets were also cautious.

Gold was flat at $1,315.30 an ounce having climbednearly 4 percent last week to record its biggest weekly rise intwo months.

Brent crude oil even dipped slightly below $110 a barrel as investors waited for the resumption of U.S. oil dataalong with the other economic numbers.

The U.S. Energy Information Administration was due torelease weekly oil data for the week ended Oct. 11 later onMonday. Its normal release schedule will resume after that, andoil data for last week will be released on Wednesday.

"The market's just in a wait-and-see mode ... The thing onmost traders' minds is what sort of story is going to be told bythe U.S. data now that it's going to be released again," saidRic Spooner, chief market analyst at CMC Markets.

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