* MSCI world equity index up 0.2 pct at 269.52
* Yen briefly hits 7-week high vs dollar
* Govt bonds lower before ECB; oil firmer
By Natsuko Waki
LONDON, Sept 3 (Reuters) - World stocks ticked higher on
Thursday, bolstered by firmer Chinese shares, while the euro
gained and the region's government bonds slipped ahead of a
European Central Bank monetary policy decision.
The yen briefly hit a seven-week high against the dollar as
investors grew cautious ahead of Friday's closely-watched U.S.
jobs report.
The ECB is expected to keep interest rates at 1 percent and
President Jean-Claude Trichet is likely to preach caution about
a speedy rebound from recession even as a survey showed the euro
zone services economy jumped back almost to recovery in August.
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Markit's Euro zone final services Purchasing Managers Index
rose to 49.9 in August from 45.7 in July, just shy of the 50.0
mark that divides growth from contraction.
"There's been a firmer tone in equities and that's taking
the lustre off safe-haven assets ... but the moves are limited
by the market's focus on the ECB," said Richard McGuire, rate
strategist at RBC Capital Markets.
MSCI world equity index <.MIWD00000PUS> was up 0.2 percent
while the FTSEurofirst 300 index <> rose 0.1 percent.
Volatile Chinese shares <> closed 4.8 percent higher.
U.S. crude oil <CLc1> rose 1.4 percent to $69.04 a barrel.
Group of 20 finance chiefs meeting in London for a two-day
meeting from Friday are set to tentatively discuss exit
strategies -- plans to wind down trillions of dollars of fiscal
and monetary stimulus measures.
However, some policymakers are keen to stress their
commitment to keep stimulus in place until the recovery becomes
self-sustainable, which would be supportive of risky assets.
"(The G20 meeting) is likely to show tension between
countries, with some wanting to prepare exit strategies and
others warning that an early exit, especially from expansionary
monetary policy measures, could lead to a double dip," BNP
Paribas said in a note to clients.
SHANGHAI CORRELATION
Emerging stocks <.MSCIEF> rose almost 1 percent.
Shanghai stocks <> climbed after China's top regulator
assured investors that the country's market was healthy,
sparking hopes of government policy support.
Chinese stocks have been increasingly correlated with other
share markets.
According to Brown Brothers Harriman, the correlation
between the Shanghai index and the S&P 500 index has shot up in
the last three months and is now more than three times more
closely correlated than over the past two years.
The correlation between the euro/dollar exchange rate and
the Shanghai index is now at its highest since the second
quarter of 2007.
The highest over the past decade was recorded in August 2005
with a correlation of about 40 percent.
The yen rose as high as 91.95 per dollar <JPY=> before
falling back to 92.32. The dollar <.DXY> fell 0.1 percent
against a basket of major currencies. The euro was up 0.2
percent at $1.4292 <EUR=>.
The September Bund future <FGBLc1> fell 15 ticks.
(Additional reporting by Kirsten Donovan, editing by Mike
Peacock)
