DJI- NEW YORK, Sept 12 (Reuters) - Stocks rose and the euro climbed to a four-month peak against the dollar on Wednesday after Germany's Constitutional Court approved the euro zone's new rescue fund, easing concerns about the region's debt crisis and leaving markets focused on prospective further easing by the U.S. Federal Reserve.
The German court approval also boosted global stocks and cut borrowing costs for Spain and Italy.
"Today's positive ruling from the court solidifies the view that European officials are getting control over the sovereign debt crisis," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
The euro EUR= climbed as high as $1.2936, its highest since mid-May. The common currency has risen more than 7 percent since it hit a two-year low of around $1.2040 in July, boosted after the European Central Bank's pledge to do whatever it takes to preserve the euro.
More gains are expected if the U.S. central bank implements further monetary easing o n T hursday, since more accommodative U.S. monetary conditions should weaken the dollar against other currencies, including the euro.
U.S. stocks have rallied on expectations the Fed will ease again. In a two-day meeting that concludes on Thursday, the Federal Open Market Committee must decide whether to launch a third round of bond purchases to lower borrowing costs and breathe more life into an economy that is not growing quickly enough to reduce unemployment. (Full Story)
"(It all hinges on) which way the Fed chooses to go," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC.
The Dow Jones industrial average .DJI gained 9.99 points, or 0.07 percent, to 13,333.35. The Standard & Poor's 500 Index .SPX was up 3.00 points, or 0.21 percent, at 1,436.56. The Nasdaq Composite Index .IXIC was up 9.79 points, or 0.32 percent, at 3,114.31.
The S&P 500 index has advanced more than 9 percent since the start of June on hopes for global central bank stimulus.
Another phase of asset purchases by the Fed would likely focus on mortgage-backed securities, strategists said.
With so much expectation built up, action by the Fed that is too cautious would be an unwelcome surprise, they said.
"If the Fed declines to move forward with another round of quantitative easing, support for risk assets may weaken," said Zach Pandl, Columbia Management senior interest rate strategist.
On Wall Street, shares of Facebook Inc FB.O jumped 7.2 percent to $20.83 after Chief Executive Mark Zuckerberg hinted at new growth areas in his first major public appearance since the No. 1 social network's rocky IPO in May. (Full Story)
Brent crude oil prices rose 30 cents to $115.70 a barrel on the German judicial decision, expectations for Fed easing and rising geopolitical risk after militants killed the U.S. ambassador to Libya. O/R
But U.S. October crude CLc1 slipped 16 cents to settle at $97.01 a barrel, after reaching $98.06. It dropped as low as $96.31, below the $96.62 200-day moving average, a technical level closely watched by traders.
"More monetary liquidity plus geopolitical risk equals higher oil prices despite fundamentals like weaker manufacturing and demand," said Kimberly DuBord, director of research at Briefing Research in Chicago.
European stocks touched a 14-month high and the MSCI global share index .MIWD00000PUS, up 6.5 percent since the end of July, hit a five-month high of 332.42 before dipping back to be up 0.4 percent at 331.72 as profit-taking set in.
The German court's ruling damped demand for safe-haven assets like U.S. Treasuries and German bunds, leading to more tepid demand for the U.S. Treasury's $21 billion auction of 10-year notes.
NYMEX- NEW YORK, Sept 12 (Reuters) - U.S. oil slipped in choppy trading on Wednesday as data showing an unexpected rebound in U.S. crude inventories pulled prices back after they received a lift from a German court ruling affirming the legality of the euro zone bailout fund.
U.S. crude oil inventories rose 1.99 million barrels to 359.09 million barrels, the U.S. Energy Information Administration said on Wednesday, against expectations stockpiles would fall 2.6 million barrels.
CBOT SOYBEAN- Sept 12 (Reuters) - Soybean futures on the Chicago Board of Trade climbed 2.6 percent on Wednesday, the biggest rise in three weeks, after the U.S. Department of Agriculture cut its forecasts for U.S. 2012 soybean yield and production, traders said.
• Soybeans bolstered by traders exiting long corn/short soybean spreads.
• Market's rise halted a five-day selloff tied to profit-taking from last week's all-time high and fears that the USDA might raise its soy yield estimate, as a few private forecasts had suggested.
• Technical buying accelerated after benchmark November soybeans SX2 climbed back above the 20-day moving average, a day after closing below that line for the first time in a month.
• The USDA lowered its forecast of U.S. 2012 soybean production to 2.634 billion bushels, from 2.692 billion in August. The USDA cut its soybean yield forecast to 35.3 bushels per acre, from 36.1 last month.
• The USDA cut its estimate of U.S. 2011/12 soybean ending stocks to 130 million bushels, from 145 million in August, reflecting an increased U.S. soybean crush.
• The USDA is scheduled to report at the end of this month on Sept. 1 quarterly soy stocks, and that figure will stand as the final 2011/12 soybean ending stocks figure.
• The USDA left its forecast of 2012/13 soybean ending stocks unchanged at 115 million bushels.
FCPO-KUALA LUMPUR, Sept 12 (Reuters) - Malaysia crude palm oil futures edged up on Wednesday after Germany's top court backed a euro zone bailout fund, raising hopes that the debt crisis will not spread further and hurt global economic growth.
German's top court had earlier ruled in favour of a 700 billion euro bailout fund, lifting global stocks and shoring up Brent crude oil prices.
"I think what happened just now on the German court ruling is something that is quite encouraging for the commodity market although it comes with conditions," said Phillip Futures analyst Ker Chung Yang.
"The approval of the European Stability Mechanism (ESM) is something we have been waiting for. It is a breakthrough for the crisis," he added.
The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to close at 2,930 ringgit ($950) per tonne. Earlier in the day, the market dropped on concerns of higher production fuelling a stock build up.
Total traded volume stood at 46,120 lots of 25 tonnes each, nearly double the usual 25,000 lots as traders piled back into the market to take positions.
Reuters technicals market analyst Wang Tao said palm oil is likely to drop to 2,869 ringgit per tonne, driven by a downward wave. A rebound from the current level will be limited to 2,947 ringgit.
Industry analyst James Fry told an industry seminar earlier in the day that palm oil prices could fall to 2,450 ringgit per tonne in the first quarter of 2013 if Brent crude dropped to $80 a barrel.
Palm oil stocks in August surged to a 10-month high of 2.1 million tonnes, exceeding market expectations, the Malaysian Palm Oil Board (MPOB) said earlier in the week.
While production is expected to be stronger, cargo surveyors have pointed to stronger demand this month. For the first ten days of September, Malaysian palm oil exports jumped 30 percent as the country shipped out more crude to India thanks to a bigger tax free quota of the grade. PALM/SGS PALM/ITS
India's palm oil imports in the new marketing year will rise 7.9 percent to 7.5 million tonnes as the world's top edible oil buyer struggles to meet demand due to faltering local oilseed output, an industry official told Reuters.
Brent crude oil rose for a fifth straight session on Wednesday, lifted by the German court decision on the giant bailout and hopes the Federal Reserve will ease monetary policy this week.
In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 rose 1 percent with some traders expecting the U.S. Department of Agriculture to slash soybean production estimates following a crop-damaging historic Midwest drought.
The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange fell 0.2 percent.
REGIONAL EQUITY- Sept 12 (Reuters) - Most Southeast Asian stock markets ended firmer on Wednesday with Thailand rising to a 16-year high as hopes of a global economic recovery due to a new eurozone bailout fund and a possible quantity easing programme by the U.S. Federal Reserve boosted appetite for the region's risky assets.
Thailand .SETI, the region's best performer this year with 22.9 percent gain, rose 0.9 percent to its highest close since July 1996. Banking shares led by a 6.3 percent rise in Bank of Ayudhya Pcl BAY.BK helped boost the overall index.
Just before the market closed, Germany's top court gave its backing to the euro zone's new 700-billion-euro European Stability Mechanism bailout fund, a key requirement for the European Central Bank's new plan to buy the bonds of struggling euro members.
Hopes of the Fed deciding on a third round of bond buying or quantitative easing (QE3) at its two-day meeting starting on Wednesday also boosted sentiment.
Indonesia .JKSE gained 0.5 percent to a four-month closing high, Singapore .FTSTI rose 0.4 percent to its highest close since Aug. 28, the Philippines .PSI added 0.4 percent, and Vietnam .VNI ended 0.5 percent firmer.
Malaysia .KLSE ended a tad weaker with a 0.03 percent fall as it suffered a foreign outflow of $45.60 million on Wednesday.
