By Matt Scuffham and Marc Jones
NEW YORK/LONDON (Reuters) -Wall Street opened higher on Monday as the start of the COVID-19 vaccine roll-out in the United States cheered investors, while Britain's pound jumped on a last-gasp extension to Brexit talks.
News that London and Brussels had agreed to "go the extra mile" to try to salvage a Brexit trade agreement set an optimistic tone, boosting Europe's main share index and lifting the euro against the struggling dollar.
"We are going to give every chance to this agreement... which is still possible," the European Union's Brexit negotiator, Michel Barnier, told reporters before updating envoys from the 27 EU countries on Monday.
Progress on coronavirus vaccines boosted sentiment, with the first doses being shipped across the United States as part of an effort to inoculate more than 100 million people by the end of March.
That was despite second waves of the pandemic forcing Germany, the Netherlands and possibly London back into stricter lockdowns. Cases surged in Japan, South Korea and parts of the United States as well.
"The vaccine has and will likely continue to provide a tailwind to the market that is allowing investors to look beyond record case levels, hospitalizations and deaths," analysts at JPMorgan (NYSE:JPM) said in a note.
On Wall Street, the Dow Jones Industrial Average rose 0.76%, the S&P 500 gained 0.86% and the Nasdaq Composite added 1.31%.
MSCI's benchmark for global equity markets rose 0.65% to 633.94, while its index for emerging markets stocks fell 0.5%. Europe's broad FTSEurofirst 300 index added 0.61% to 1,517.92.
Japan's Nikkei rose 0.3% as a survey showed the mood among Japanese businesses improved in the December quarter.
In currencies, Sterling was the day's big mover, gaining on both the euro and the dollar as what last week had appeared to be evaporating prospects of a Brexit agreement came back to life.
Sterling was last trading at $1.3335, up 0.85% on the day after earlier climbing 1.2% to $1.3423.
"Even in the face of amped up rhetoric, we continue to think a deal is the most plausible outcome," said AXA Group chief economist Gilles Moec.
The dollar index fell 0.025%, with the euro up 0.16% to $1.213. The Japanese yen strengthened 0.01% versus the greenback at 103.99 per dollar.
The Federal Reserve's policy meeting on Dec. 15-16 will be an added hurdle for the dollar. The market is assuming the central bank will merely refine its forward guidance on policy rather than buying more bonds or "twisting" its portfolio to add longer-dated debt.
The Bank of England on Thursday and the Bank of Japan on Friday will close out central bank meetings for 2020. Before that, Wednesday brings the global flash PMIs and on Tuesday, China will issue its monthly data.
"The risk is then if the Fed does unveil a surprise twist at this meeting, then Treasuries could rally and the USD could fall," said Tapas Strickland, a director of economics at NAB.
An extra wrinkle is the chance of a U.S. deal on fiscal stimulus after a top Democrat hinted a compromise was possible to get an agreement past Republican objections.
Reuters reported a $908 billion relief plan would be split in two to win approval and could be introduced as early as Monday.
The talk of stimulus helped put a floor under gold, leaving it lower at $1,833 an ounce. Gold has gained more than 21% this year.
Oil prices rose on Monday, maintaining a six-week rally as investors priced in a global recovery next year. [O/R]
U.S. crude rose 21 cents to $46.78 a barrel. Brent crude futures rose 21 cents to $50.18.