World shares hit their latest in a run of record highs on Tuesday, while the dollar was at it loftiest in 1-1/2 months as encouraging US data lifted it in tandem with global bond yields.

MSCI's 47-country 'All-World' index which contains more than 2,400 firms was pushed to the fresh peak as Europe's main bourses added to gains made in Asia and after Wall Street set its own record close again overnight.

It was the tenth new high since late July alone and extends the year's blizzard of records that started in February to more than 40 with no sign it is about to run out of steam yet.

Strong data

SEB investment management's global head of asset allocation Hans Peterson pointed to strong economic and trade data and signs that firms in large economies like the United States and Europe were finally increasing investment spending.

“The fun thing about that is that is will take over from the consumption cycle and means the (global business growth) cycle will be longer than consensus. So I think that is the mechanism that is driving equities at the moment.”

“So we are long equities, we are long emerging markets and we are long Europe. We are risk on.”

'Trumpflation' trade

Currency and bond markets were also flashing similar signals, especially that the 'Trumpflation' trade, which looked to be fatally wounded just a few months ago, was back in force.

The dollar climbed 0.2 per cent to 93.74 against a broad basket of other top world currencies.

That was its highest level since August 17 and came as a firming view that the Federal Reserve will raise US interest rate for a third time this year in December kept two-year US government bond yields hovering at a 9-year high.

Borrowing costs across the euro zone nudged higher too. Southern European bonds continued to underperform meanwhile as political tensions remained in Spain after Sunday's independence vote in Catalonia was marred by police violence.

The uncertainty also kept the squeeze on the euro. It dipped 0.2 per cent to $1.1709, while the dollar added 0.3 per cent against the yen to 113.11 yen to keep it within reach of last week's two-month high of 113.26 yen.

Crude oil slips

Crude oil futures extended losses after tumbling on Monday, as a rise in US drilling and higher OPEC output put the brakes on their recent rally and rekindled concerns about oversupply.

Brent crude slipped 0.4 per cent to $55.90 a barrel, after marking a third-quarter gain of about 20 per cent. US crude fell 0.3 per cent to $50.42.

“The fourth quarter is not too kind to the price of oil, as we switch from summer demand to expectations of winter demand," said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

Spot gold edged down 0.1 per cent to $1,270.06 per ounce, plumbing its lowest since August 15 as the dollar continued to strengthen.

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