World Markets Lift on Signs That a Fiscal Deal May Be Close

“Stocks (MXWD) extended a three-month high and commodities gained on signs of progress in U.S. budget talks. The yen traded near a 20-month low.

The MSCI All-Country World Index added 0.2 percent as of 8:01 a.m. in London, headed for the highest close since Sept 14. Standard & Poor’s 500 Index futures advanced 0.3 percent. U.S. and Japanese government bonds fell. The S&P GSCI Index of raw materials gained 0.4 percent. The yen was at 83.95 per dollar after touching 84.48 yesterday, the weakest since April 2011.

President Barack Obama proposed a budget plan that would cut about $1.2 trillion in federal spending and raise a similar amount in taxes, according to a person familiar with the talks. European Central Bank President Mario Draghi said ECB policies and governance reforms in the euro area have revived confidence that will help foster a gradual economic recovery.

“Stocks are gathering momentum amid signs of progress on the U.S. fiscal cliff talks,” said Matthew Sherwood, head of markets research at Perpetual Investment, which manages about $25 billion in Sydney….”

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