* Prospect of ECB, Fed easing supports global equities
* Europe climbs as car sector has best day since early January
* MSCI Asia-Pacific index gains 0.15%, Nikkei adds 0.95%
* Pound sags as hard Brexit advocate Johnson becomes UK PM
* Oil eases back after two days of Iran tension driven gains
* World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, July 23 (Reuters) - A speeding autos sector and hopes for even lower borrowing costs buoyed world stocks on Tuesday, while a brief sterling rally proved short-lived as hard-Brexit advocate Boris Johnson was confirmed as Britain's new prime minister.
Corporate results from oil bellwether Halliburton (NYSE: HAL ), Swiss bank UBS and Apple (NASDAQ: AAPL ) supplier AMS AMS.S had all helped Europe's morning mood though it was a 4% surge from the auto sector .SXAP that provided the real torque. .EU
German parts makers Hella HLE.DE and French peer Faurecia EPED.PA surged as much as 6% and tyre maker Continental CONG.DE leapt 5.8% despite another profit warning, putting the sector on track for its best day since Jan. .EU
The region-wide STOXX 600 benchmark .STOXX added over 1% while Wall Street's main markets were expected to open 0.3%-0.4% higher later after a flurry of largely upbeat earnings from the likes of Coca-Cola and United Technologies. .N
"The results are coming in and have helped the market today and we are still under the influence of interest rates," said Francois Savary, the chief investment officer of Prime Partners, referring to expectations of U.S. and ECB rate cuts.
Ahead of the U.S. open, the International Monetary Fund lowered its forecast for global growth this year and next, warning that more U.S.-China tariffs, auto tariffs or a disorderly Brexit could further slow the world economy. currencies, the dollar reached a two-week high after U.S. President Donald Trump and congressional leaders agreed on Monday to a two-year extension of the U.S. debt limit, ending the threat a government default later this year. /FRX New Zealand dollar NZD=D3 led G10 losses after its central bank said it had "begun scoping a project to refresh our unconventional monetary policy strategy and implementation", although it added it was at a very early stage.
Britain's pound was the other notable mover as it slid back towards the mid $1.24 region GBP=D3 having briefly rallied after eurosceptic Johnson was elected as the replacement for outgoing Prime Minister Theresa May. that Britain will crash out of the European Union without a withdrawal agreement have grown since Johnson said he would pull Britain out on Oct. 31 "do or die".
The pound GBP=D3 traded 0.2% weaker at $1.2445, near last week's 27-month low of $1.2382, having made it as high as $1.2481.
Credit ratings agency Moody's and investment Goldman Sachs (NYSE: GS ) both warned the risk of a no-deal Brexit was now higher.
"With Boris Johnson at the helm, the tail risks are likely to intensify ─ well into October," Goldman said.
"We raise our odds on a 'no deal Brexit from 15% to 20%, and we reduce our odds on 'no Brexit' at all from 40% to 35%."
The euro fell too to $1.1189 EUR= , although rather than Brexit it was weighed down more by the likelihood of even more negative ECB interest rates in the coming months. The central bank meets on Thursday.
"It is going to take a bold stroke by the ECB to both satisfy markets clamouring for incremental easing and make a difference to the economy, all the while remaining inside its institutional setting and not destabilising the financial system," wrote Carl Weinberg, chief international economist at High Frequency Economics.
SUMMER HOT SPOTS
Europe's government bonds barely budged, with investors largely happy to sit on their hands having seen their yields slumping since the start of the year.
U.S. yields did tick fractionally higher in response to the debt ceiling deal but Germany's 10-year bond yield, the benchmark for the euro zone, was down a basis point, at minus 0.35% and not far from the record low -0.40% posted at the start of the month. DE10YT=RR
The next events to watch include a vote on Thursday in the Spanish parliament on the future government. Caretaker Prime Minister Pedro Sanchez failed in his first attempt on Tuesday to get parliament's backing to form a government, leaving him two days to try and strike a deal with the far-left Unidas Podemos. was also a rumoured meeting between the leaders of the two squabbling parties who make up Italy's coalition government, 5-Star Movement's Luigi Di Maio and League's Matteo Salvini.
"Investors are waiting to see whether this government will survive," said DZ Bank strategist Daniel Lenz. "One possibility is that the coalition continues but both agree to replace (Giuseppe) Conte as prime minister, which would be a very bad signal."
Conte is widely seen as a moderating influence on the anti-establishment Italian government, particularly in terms of its relationship with Brussels.
In commodities, Brent crude LCOc1 edged lower to reach $63 per barrel, having shot up 1.2% the day before on concern over possible supply disruptions after Iran seized a British tanker last week. O/R
U.S. West Texas Intermediate crude CLc1 slipped 23 cents to $55.99. "The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far," said Carsten Fritsch, analyst at Commerzbank (DE: CBKG ).
"It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran."
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