LONDON - European stocks opened higher on Wednesday as hopes for more monetary and fiscal stimulus helped assuage worries about global recession, political turmoil in Italy and endless trade wars.

Traders are waiting for the Federal Reserve's annual Jackson Hole symposium later this week and a Group of Seven summit this weekend for clues on what steps policymakers will take to boost economic growth.

Much depends on what the Fed does with U.S. interest rates, making markets hyper-sensitive to the minutes - due later on Wednesday - of its last meeting.

"People are looking ahead to Jackson Hole later this week and the message that [Fed Chairman] Jerome Powell may or may not give us on the direction of monetary policy. That is the highlight of the week and we are waiting with bated breath," said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

Futures 0#FF: are fully priced for a quarter-point cut in rates next month and cuts of more than 100 basis points by the end of next year.

Morgan Stanley economist Ellen Zentner advised clients to watch for the use of the word "somewhat" when Powell describes future policy.

"Acknowledgment that downside risks have increased with no characterisation of 'somewhat' could be taken as confirmation that it is likely the Fed makes a larger cut in September," Zentner wrote in a note.

With so much riding on the Fed, investors were cautious and volumes subdued. The Euro STOXX 600 was 0.6% higher, with Italy outperforming after a rout yesterday following the resignation of Italian Prime Minister Giuseppe Conte.

Shares in Milan-listed Fiat Chrysler climbed 3.1% after Italian media reported that talks between Fiat and Renault never stopped. That put the STOXX 600 Autos Index on track for its best day in a month.

GEA Group, a German food-processing-machinery company, and outsourcing group Capita gained more than 5% after Goldman Sachs upgraded its rating on the stocks.

President Donald Trump showed no signs of backing down in his tussle with China, declaring on Tuesday a confrontation was necessary even if it hurt the U.S. economy in the short term.

Shortly afterward, the U.S. government approved an $8 billion sale of Lockheed Martin F-16 fighter jets to Taiwan, a move sure to draw Beijing's ire and further dim prospects for a trade deal.

Political turmoil in Italy, Britain and Hong Kong has also heightened uncertainties.

Italian bond yields steadied after falling on Tuesday, as Italian President Sergio Mattarella begins two days of talks that will lead either to formation of the country's 67th government since World War Two or to early elections.

Germany bond yields rose before the sale of new 30-year government bonds that could test investor demand for deeply negative bond yields. Germany plans to sell 2 billion euros of the new bond, with a 0% coupon.

MORE STIMULUS Alarm bells started ringing last week when yields on U.S. 10-year notes fell below two-year yields for the first time since 2007, an inversion that has preceded previous recessions. That was enough to prompt Trump's administration to look for ways to stimulate the U.S. economy.

In addition, the central banks of the euro zone, Australia and China are all expected loosen monetary policy some more this year. Germany is considering fiscal stimulus.

Those prospects have driven yields lower. Benchmark U.S. 10-year Treasury yields stood at 1.57% on Wednesday, down from a high of 1.625% on Monday.

Currency markets were mostly subdued. The euro struggled was last down 0.1% at $1.1092. The dollar, measured against a basket of currencies, rose 0.1% to 98.265.

Sterling was down 0.3% at $1.2134 and 0.2% against the euro at 91.405 pence.

In commodities markets, U.S. crude rose 17 cents to $56.30 per barrel. Brent added 23 cents to $60.26.

Spot gold was weaker at $1,498.15 an ounce.

(Additional reporting by Swati Pandey and Wayne Cole in Sydney; editing by Larry King) ((Tom.Arnold@thomsonreuters.com; +97144536265; Reuters Messaging: tom.arnold.thomsonreuters.com@reuters.net))