GLOBAL MARKETS-Shares march on as alarm bells ring for metals

* World shares inch up on way to best week in over a month
* Dollar back on the charge as Draghi sends euro tumbling
* Copper near 6-1/2-year lows, nickel near 2003 low
* Baltic sea freight index hits all-time low
* Wall Street set to open higher, up almost 3 pct on week

By Marc Jones
LONDON, Nov 20 (Reuters) - World shares headed for their
best week in over a month on Friday, though alarm bells over
global growth were ringing in metals markets as copper hovered
at its lowest level since 2009 and nickel since 2003.
The commodities crunch was compounded as the dollar .DXY
began to flex its muscles again after a quiet couple of days,
gold XAU= slipped back towards a 5-year low and a major sea
freight index .BADI hit its lowest level on record.
Global stock markets seemed largely oblivious, however.
Wall Street expected to start 0.2 to 0.3 percent higher with
its main S&P 500 .SPX and Dow Jones Industrial .DJI indexes
on course for near 3 percent rises on the week.
European shares nudged higher too .FTEU3 as the main
London .FTSE , Frankfurt .GDAXI and Paris .FCHI markets
headed for 2-3.5 percent weekly gains and Tokyo's Nikkei .N225
ended Asia's week near a three-month high. .T
The euro was sent tumbling back below $1.07 to $1.0670 as
Mario Draghi gave the clearest hint yet that the ECB will expand
its already 1 trillion euro stimulus programme next month and
cut its key deposit rate even deeper into negative territory.
ID:nF9N0ZF02O
"If we decide that the current trajectory of our policy is
not sufficient... we will do what we must to raise inflation as
quickly as possible," Draghi said at a conference in Frankfurt,
adding that a decision will be made at the ECB's Dec. 3 meeting.
One of the most striking things is that the move will come
just over a week before the ECB's U.S. counterpart, the Federal
Reserve, is likely to deliver the first hike in U.S. interest
rates rise in almost a decade.
The expected divergence pushed the dollar .DXY back up
towards a 7-month high against a basket of top currencies in
early European trading. Goldman Sachs (N:GS) on Thursday made a
stronger greenback its top trade tip for 2016. ID:nL8N13E3XY
The prospect of higher Fed rates and dollar, alongside
concerns about China's economic health, continue to generate
uncertainty.
For example, copper CMCU3 - seen as a good gauge of the
global economy because of its wide industrial use - has been hit
by persistent worries that supply cuts won't be enough to offset
the pressure on prices caused by weak demand in top user China.
It slumped to a 6-1/2-year low of $4,573.50 per tonne before
bouncing back to $4,655.00, still down 3.8 percent so far this
week.
The Baltic Index .BADI , which tracks rates for ships
carrying dry bulk commodities and is viewed as a good reflection
of the health of world trade, slid to a record low, having
fallen 58.8 percent from its peak this year. urn:newsml:reuters.com:*:nL8N13E4CP
"Many economies in Asia and emerging markets are still not
doing that good. Demand for raw materials remains very weak,"
said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui
Asset Management in Tokyo.

OIL PREDICTIONS
Oil prices were also not far from near three-month lows
touched earlier this week.
Global benchmark Brent futures LCOc1 last stood at $44.17
per barrel, compared to Monday's low of $43.15, while U.S. crude
sagged to just above $40 a barrel. O/R
Crude futures have already lost around 60 percent of their
value since mid-2014 as supply exceeds demand by roughly 0.7
million to 2.5 million barrels per day to create a glut that
analysts say will last well into 2016.
Market data also suggests oil traders are preparing for
another drop in prices by March, as what is expected to be an
unusually warm U.S. winter dents demand just as Iran's exports
hit global markets after sanctions on the country are lifted.
"Uncertainty is so high in the world's crude markets," said
Kang Yoo-jin, commodities analyst at NH Investment and
Securities based in Seoul. "Prices will have high volatility in
2016 and particularly in the first half."
In debt markets, 2-year U.S. yields were up for their fourth
week in the last five.
Greek government bond yields rose sharply though, giving up
early falls, as euphoria surrounding the passing of a key reform
bill gave way to concerns about renewed political instability.
Greece's parliament approved the legislation on Thursday to
secure further aid from its international lenders, but Prime
Minister Alexis Tsipras expelled two dissenting coalition
lawmakers after the vote. The government can now count on only
153 votes in the 300-seat chamber. ID:nL8N13E52G
Mario Draghi's soothing sounds underpinned the broader euro
zone bond market, however, as core German Bunds DE10YT=TWEB ,
but also French, Italian and Spain bonds, cruised towards their
second straight week of yield falls. GVD/EUR
Neil Williams, chief economist of fund manager Hermes in
London, said that one of the things helping equity markets was
the increasing degree of clarity on what the Fed and ECB will do
next month, as well as China's support plans for its economy.
"China obviously needs watching. When a $10-1/2 trillion
economy which accounts for about a half of the world's commodity
demand slows we need to take notice," Williams said. "But I'm
increasingly reassured that they have the policy buttons to
press and are pressing them."

(Editing by Mark Heinrich)