By Avantika Chilkoti

-- Yield on Italian bonds touched lowest since 2016

-- Europe stocks rally, Asia mixed

-- Pandora up more than 13%

Global stocks mostly gained on Wednesday ahead of fresh data from the Federal Reserve and after President Trump said he was weighing measures to boost the world's largest economy.

The Stoxx Europe 600 climbed 1.1% in morning trade, led by its autos sector. Asian indexes were mixed, with most major regional markets only making small moves.

Bond and equity markets have been gloomy about global growth in recent weeks, with many investors expecting a cycle of monetary easing from leading central banks. On Wednesday, investors were awaiting signs that the U.S. Federal Reserve might cut rates further when the central bank publishes minutes from its July meeting later in the day.

Analysts will be watching closely for insights into the debate surrounding last month's rate cut, as many, including Leslie Sita, portfolio manager in Lombard Odier IM's fundamental fixed income team, flagged concerns around the president's criticism of Fed Chairman Jerome Powell.

"Trump has made it clear he didn't like Powell's policy," she said, adding that strategists at Lombard Odier are forecasting a 50 basis point cut at the next meeting. "Even if Powell was wanting to mention that he's independent in the way he does things, obviously the pressure was there."

Among the biggest gainers on the Stoxx Europe 600 index was Pandora, the Danish jewelry group, which was up more than 13% after results on Tuesday spurred hopes that a restructuring plan was helping the business.

The yield on Italian government debt continued to drop, reaching its lowest level in around three years on Wednesday after Prime Minister Giuseppe Conte resigned on Tuesday, triggering a power struggle within the government in Rome at a time when growth is faltering. The yield on the country's 10-year bonds dropped to 1.365% on Wednesday, compared with 1.441% on Monday afternoon. Yields and prices move in opposite directions.

Investors seemed to be cheering the collapse of the government and piling into Italian government debt. But analysts at Barclays warned in a recent note that "the probability of a market-friendly outcome is on par with unfriendly ones," as the possibility of a caretaker government and a snap election remain on the table, alongside other outcomes.

Italy's benchmark FTSE MIB equities index rallied 1.6%, outperforming other indexes in the region.

Meanwhile, the yield on 10-year U.S. Treasurys ticked up to 1.601% on Wednesday, from 1.557% on Tuesday.

In commodities, the price of Brent crude was up 0.9% to $60.57 a barrel as tensions in the Strait of Hormuz threatened global supplies while analysts worried global trade concerns could cap demand for oil in the coming months.

Australia announced plans to join a U.S.-led coalition protecting oil tankers and cargo ships from attacks by Iran in the region on Wednesday, as pressure on Tehran increased.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

(END) Dow Jones Newswires

August 21, 2019 05:25 ET (09:25 GMT)

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