* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* For Reuters Live Markets blog on European and UK stock markets, please click on: LIVE/
(Updates prices, adds commentary and chart)
By Elizabeth Howcroft
LONDON, Aug 25 (Reuters) - European shares opened higher on Tuesday, with market sentiment propped up by the United States and China saying they are still committed to their Phase One trade deal, and some increased optimism around COVID-19 vaccine development.
After the STOXX 600 saw its biggest daily gain in almost two weeks on Monday, the bullish mood continued throughout the New York and Asian sessions overnight. U.S. and Chinese officials had a phone call in which they reaffirmed their commitment to the Phase One trade deal agreed in January, a positive sign after months of disputes over the COVID-19 pandemic, China's national security law and Chinese technology firms. sentiment was also buoyed by a Financial Times report that the U.S. government was considering fast-tracking an experimental vaccine, developed by the University of Oxford and AstraZeneca, to make it ready before the November elections. spokeswoman for AstraZeneca denied the company had discussed an emergency-use authorization for its potential vaccine with the U.S. government.
European share indexes strengthened, with the STOXX 600 up 0.7% .STOXX and London's FTSE 100 up 0.2% .FTSE at 1103 GMT.
The MSCI world equity index .MIWD00000PUS , which tracks shares in 49 countries, was up 0.2%. MSCI's main European Index .MSER was up 0.8%.
U.S. stock index futures rose for the fourth session in a row.
VACCINE TREATMENT
"It has been suggested that yesterday's rally was as a result of optimism over a new vaccine treatment being fast- tracked by October, however the reality is that anyone with an ounce of common sense will know that this outcome is highly unlikely to happen," wrote Michael Hewson, chief market analyst at CMC Markets UK.
Hewson said that on Tuesday the rise could be attributed to inertia and a lack of bad news. Expectations of continued central bank stimulus means that the default position for markets is to be rising, he said.
The director of the Oxford Vaccine Group said on Tuesday that the vaccine in development could be put before regulators this year. dollar index fell, down 0.2% at 93.083 by 1208 GMT =USD , while the euro was up 0.3% at $1.1827 EUR=EBS .
Euro zone bond yields rose for the second day in a row, with the benchmark ten-year German Bund yield up 6 basis points at -0.438% DE10YT=RR .
Germany's final second-quarter GDP was revised slightly upwards to a 9.7% contraction in April, May and June, up from 10.1%. represents the sharpest fall since Germany began to record quarterly GDP calculations in 1970. German business morale improved more than economists had expected in August, boosting hopes for a strong recovery from the coronavirus shock in Europe's largest economy. prices were up, with Brent crude oil futures LCOc1 up 0.7% at $45.46 a barrel by 0806 GMT. West Texas Intermediate crude CLc1 up 0.2% at $42.71 a barrel. participants are looking ahead to the U.S. Federal Reserve Chair Jerome Powell's address at the Jackson Hole symposium - his first public appearance since the central bank's policy meeting in late July. have been awaiting details on possible changes to how the Fed targets inflation. In the current environment, that could mean the Fed sticks with aggressive stimulus longer than under its previous rubric.
"Unless you get rid of social distancing completely, then the investment narrative and paradigm has changed completely. I think central banks are in for the long term," CMC's Hewson said.
"I don't think Powell is going to be anything other than doveish and obviously that will be a tailwind for stocks."
Markets seemed indifferent to news that two European patients and a Hong Kong man are confirmed to have been re-infected with coronavirus. Emerging markets
http://tmsnrt.rs/2ihRugV Asset performance in dollar terms
https://tmsnrt.rs/3hs2F23
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