(Adds U.S. market open, dateline, byline; previous LONDON)
* Equities gain on hopes of dovish Fed stance
* Dollar slips before Fed meeting
* Oil gains as storm hits U.S. output, inventories drop
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Reuters Live Markets blog: LIVE/
By Herbert Lash
NEW YORK, Sept 16 (Reuters) - Shares rose and the dollar fell on Wednesday on stronger risk appetite as U.S. consumer data showed steady demand ahead of a Federal Reserve meeting that investors hope will signal a renewed commitment to its dovish policy stance.
Longer-term U.S. Treasury yields fell and Italy's 10-year borrowing costs hit their lowest level since late August as the Fed is expected to provide a somewhat rosier economic outlook and a renewed pledge to keep interest rates low for a long time. prices edged higher and oil prices rose for a second day, rising more than 2%, as Hurricane Sally closed U.S. offshore production and an industry report showed U.S. crude inventories unexpectedly decreased. the Fed's last meeting in August the U.S. central bank adopted a new approach to inflation and unemployment that will allow the economy to run a little hotter than in the past to help ensure jobs growth for lower income earners.
The Federal Open Market Committee will release its policy statement and economic projections at 2 p.m. (1800 GMT), followed by Fed Chair Jerome Powell's news briefing half an hour later. market will be looking for a fuller explanation for how the Fed will achieve its average inflation target, said Marvin Loh, senior global macro strategist at State Street (NYSE:STT).
"The Fed has said we're going to strive for a sustainable average inflation number around 2%, but we don't really know what that means," Loh said.
"The dollar has become the litmus test for whether or not it's dovish or hawkish," Loh said, referring to the Fed. "The signals that we get from the fixed income market are not as strong as they used to be."
MSCI's benchmark for global equity markets .MIWD00000PUS rose 0.5% to 578.52, while in Europe the broad FTSEurofirst 300 index .FTEU3 added 0.31% to 1,443.57.
On Wall Street, the Dow Jones Industrial Average .DJI rose 0.78%, the S&P 500 .SPX gained 0.53% and the Nasdaq Composite .IXIC added 0.15%.
London's FTSE 100 lagged other European indexes, falling 0.59% .FTSE , but the struggling pound was propped up by a weaker dollar. emerging markets index .MSCIEF rose 0.57%.
U.S. consumer spending slowed in August, with retail sales excluding automobiles, gasoline, building materials and food services sliding 0.1% after a downwardly revised 0.9% increase in July.
Retail sales lost a little bit of steam in August, but consumers overall are still doing well despite modest weakness relative to expectations, said Russell Price, chief economist at Ameriprise Financial (NYSE:AMP) at Troy, Michigan.
When the pandemic slowed economic growth, consumers were in a relatively strong financial condition, the direct opposite of what is normally the case for an economic downturn, he said.
"Consumers are still overall doing well despite the modest weakness relative to expectations," Price said.
The yen rose overnight and extended gains that hit a nearly seven-week high of 104.995 to the dollar as investors sought safer assets.
The dollar index =USD fell 0.223%, with the euro EUR= down 0.03% to $1.1841.
The Japanese yen JPY= strengthened 0.53% versus the greenback at 104.85 per dollar.
Spot gold prices XAU= rose 0.61% to $1,967.37 an ounce.
Brent crude futures LCOc1 rose $1.23, to $41.76 a barrel. U.S. crude futures CLc1 gained $1.40, to $39.68 a barrel.
Zinc prices pushed towards the 16-month highs hit earlier this month as resurgent Chinese industry bolstered the outlook for demand and the yuan strengthened, making metals more affordable for Chinese buyers.
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