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* World shares up 0.5% after gains in Asia, Europe
* Dollar dips on expectations of low U.S. rates
* Gold at 3-1/2-month high, copper up, zinc shines
* Global asset performance http://tmsnrt.rs/2yaDPgn
* World FX rates http://tmsnrt.rs/2egbfVh
By Danilo Masoni and Paulina Duran
MILAN, May 18 (Reuters) - World stocks pushed higher on
Tuesday and the dollar dipped to near three-month lows as bets
that U.S. interest rates would remain low helped investors look
past rising COVID-19 infections in Asia.
Equities in Europe rose in morning trade with the STOXX 600
regional benchmark closing in on its previous record
high, up 0.5%, while Wall Street looked set to follow with S&P
500 futures gaining almost 0.4%.
MSCI's broadest index of Asia-Pacific shares outside Japan
rallied 1.6%, as it recovered part of the losses
suffered recently after new Coronavirus cases prompted some
economies to impose fresh anti-virus restrictions.
MSCI's gauge of stocks across the globe
gained 0.5% by 0810 GMT.
Market volatility has risen in recent weeks on worries that
abundant stimulus and rising inflation pressures in the U.S.
could force the Federal Reserve to reduce its support to prevent
the world's largest economy from overheating.
"Taper talk is the new taper," said Mike Kelly, head of
multi-asset at PineBridge Investments.
"Structural inflation is still some way off but temporary
supply-side bottlenecks will last at least until September. The
Fed will try to talk their way through it and markets will get
frustrated. But the more temporary inflation overshoots, the
harder it will be to avoid taper talk," he added.
But remarks on Monday from Fed Vice-Chair Richard Clarida,
who pointed to the weak April jobs report as proof of the slack
in the economy, and other Fed policymakers helped reassure
markets that U.S. monetary policy will remain easy.
"In short, the Fed's music is still the same. It is not yet
time for tapering, and will not be for a while," said Giuseppe
Sersale, fund manager at Anthilia in Milan.
Their comments came ahead of Wednesday's release of the
minutes from the Fed's policy meeting last month, which will be
closely watched for any indications about where monetary policy
is headed this year.
Markets also shrugged off data showing Japan's economy
shrank more than expected in the first quarter as a slow vaccine
rollout and new COVID-19 infections hit spending.
Japan's Nikkei rose 2.3%, while shares in Taiwan
, which is seeing a spike in cases, rose 4.7% on news the
country is in talks with the U.S. for a share of the vaccine
doses Washington plans to send abroad.
Goldman Sachs economists see the delays in global vaccine
supplies as temporary and expect about half of the world's
population to be vaccinated by the end of 2021.
The dollar plumbed a six-year trough against the Canadian
dollar and teetered near multi-month lows versus European
currencies, as Treasury yields stalled amid renewed expectations
the U.S. will not hike interest rates anytime soon.
The dollar traded at $1.2202 against the euro, its
weakest since Feb. 25. The Canadian dollar advanced to
a six-year high of C$1.2030 against the greenback, aided by
higher crude oil prices.
The dollar index fell 0.4% to its lowest since Feb.
25.
U.S. 10-year Treasury yields were little changed
at 1.651%.
Spot gold rose 0.2% to $1,869.9 an ounce, a
three-and-a-half month high, as a weaker U.S. dollar and growing
inflationary pressure bolstered the metal's appeal as an
inflation hedge.
The weaker dollar also helped copper prices rise,
while zinc prices in Shanghai climbed as much as 6.1% to their
highest in more than 13 years on supply concerns in China.
Oil prices rose, with Brent crude and West Texas
Intermediate (WTI) crude both up around 0.9% on
expectations of stronger fuel demand as the U.S. and European
economies reopen.
Bitcoin rose 3.5%, paring some of its steep
losses since Tesla boss Elon Musk said he would stop
taking bitcoin as payment due to environmental concerns. Ether
jumped 6.7%.
(Reporting by Danilo Masoni, Sujata Rao and Paulina Duran,
Editing by William Maclean)