By Harry Robertson and Tom Westbrook
LONDON/SINGAPORE (Reuters) - Global stocks edged higher on Wednesday while bond yields dropped again as investors waited for minutes from the latest Federal Reserve meeting and U.S. inflation figures.
Meanwhile, oil prices were little changed as traders kept an eye on the conflict between Palestinian militants and Israel. Prices spiked on Monday in the wake of Hamas' weekend attack on southern Israel, before cooling somewhat on Tuesday.
The MSCI All World stock index was last up 0.21% on Wednesday, after rising 1% in the previous session.
Futures for the S&P 500 were up 0.26% after the stock index climbed 0.52% on Tuesday. Nasdaq and Dow Jones futures rose 0.4% and 0.27% respectively.
Europe's continent-wide STOXX 600 index was 0.33% higher in early trading after surging 1.96% in the previous session. French luxury company LVMH fell 5.9% after it posted results that showed its sales growth slowed.
"I'm expecting the market to remain in wait-and-see mode throughout the day because we have the Fed minutes tonight.... and U.S. inflation tomorrow," said Florian Ielpo, head of macro at Lombard Odier Investment Managers.
Global stocks, which had been on the slide since early August, have rallied for the last few sessions. Investors have shifted back to equities as U.S. bond yields - which underpin borrowing costs around the world - have dropped from their highest levels since 2007 as Fed officials have suggested rate hikes are over.
BOND YIELDS TUMBLE AGAIN
Bond yields, which move inversely to prices, tumbled again on Wednesday. The yield on the global benchmark 10-year U.S. Treasury note was last down 8 basis points at 4.573%, sharply below last week's peak of 4.887%, which was the highest level since 2007.
"In a matter of days these are massive moves," said Arthur van Slooten, global asset allocation strategist at Societe Generale.
"The fall in bond yields has been driven by a fall in oil prices, which reflects economic concerns, as well as the Fed hinting they won't raise rates again."
Atlanta Fed President Raphael Bostic was applauded when he told a room full of bankers in Nashville on Tuesday: "I actually don't think we need to increase rates anymore."
Meanwhile, oil prices have fallen from their recent peaks and remain relatively steady despite the prospect of conflict in the Middle East spilling over from Israel and Gaza.
Brent crude oil futures traded at $87.78 a barrel, down 0.62% on the day. They rose to $89 a barrel on Monday after Hamas' attack, but remain around 11% lower than the $97.69 level reached in late September.
The minutes from the Fed's September meeting, when it chose to hold interest rates at 5.25% to 5.5% but signalled more hikes might be on the way, are due to be released at 1800 GMT (2 p.m. ET). Investors will scrutinise them for hints about the economic outlook and where U.S. rates are heading.
On Thursday, the latest U.S. inflation data is expected to show that the growth in prices slowed slightly to 3.6% in September, from 3.7% in August.
The dollar index, which tracks the currency against six major peers, was trading roughly flat at 105.8. It has fallen around 1.6% since hitting an 11-month high of 107.34 last week.
A Bloomberg report on China preparing stimulus to help its economy supported the mood in Asian equity markets overnight. A broad rally lifted Hong Kong's Hang Seng index to a two-week high.
The euro, which also received a boost from the report on Tuesday, was last flat at $1.0605.
(Reporting by Harry Robertson in London and Tom Westbrook in Singapore; Editing by Sam Holmes and Alex Richardson)