World stocks held near a 1-1/2 month high on Monday as expectations for solid third-quarter earnings and hopes for a resolution to the euro zone debt crisis supported risky assets, but gains were limited due to caution ahead of a key EU summit.

Wall Street was set for a steady open later after U.S. stock jumped on Friday following stronger-than-expected earnings from Google (GOOG.O). More Q3 results are due later this week.

But the euro fell back and German government bonds bounced higher as caution set in, with German Finance Minister Schaeuble saying a forthcoming EU summit would not yield a definitive solution to the region's debt crisis.

G20 finance ministers and central bankers said at a meeting in Paris that they expected euro zone leaders to decisively address the current challenges through a comprehensive plan at a European Union summit on October 23.

With anticipation for a bold policy initiative running high, investors are preferring to unwind overly pessimistic positions although they were aware of a room for disappointment.

The question now is whether one should be fading this rally into a potential disappointment on October 23, as most investors we speak to believe, or remain in 'buying the dips' mode. We continue with the latter, JP Morgan analyst Mislav Matejka said.

The key investor concern is regarding euro bank deleveraging and its impact on the economy. We ... note that only a third of bank assets are used to lend to the private economy.

The MSCI world equity index .MIWD00000PUS rose 0.3 percent, hitting levels not seen since late August. The index gained 5.4 percent last week, its biggest weekly gain since July 2009, and has rebounded nearly 14 percent since hitting a 15-month low earlier this month.

U.S. stock futures were unchanged on the day, pointing to a flat open on Wall Street. Goldman Sachs (GS.N), Bank of America (BAC.N) and Apple Inc (AAPL.O) are all due to report third-quarter earnings this week.

European stocks markets/index?symbol=gb%21FTPP>.FTEU3 rose 0.8 percent while emerging stocks .MSCIEF gained 1.5 percent.

U.S. crude oil was steady at $86.76 a barrel. It earlier draw support from expectations that the resolution in the euro zone debt crisis would help stem a slowdown in oil demand growth.

Bund futures erased earlier losses and rose 103 ticks.

The euro lost 0.8 percent to $1.3777, having hit a one-month high near $1.39 on Friday.

The euro will probably go above $1.40 as we go through this week, but we could see a 'buy the rumor, sell the fact' response next week, said Steve Barrow, head of G10 currency research at Standard Bank.

My bias would be to sell into any strength, but not aggressively.

The dollar .DXY rose 0.4 percent against a basket of major currencies.