* German finance minister Scholz hints at big fiscal push
* China factory-gate prices fall sharply in August
* Markets leery before ECB meeting
(Updates with close of U.S. markets)
By Chuck Mikolajczak
NEW YORK, Sept 10 (Reuters) - Bond yields climbed and a
gauge of world stock markets recovered from previous lows to
trade flat on Tuesday, as uncertainty grew over the mix of
stimulus the European Central Bank will add to boost a slumping
economy this week amid fresh signs global growth was slowing.
Germany's 30-year benchmark bond yield DE30YT=RR briefly
broke into positive territory for the first time since Aug. 5,
while U.S. Treasury yields US2YT=RR US10YT=RR US30YT=RR
climbed to three-week highs. Benchmark U.S. 10-year notes US10YT=RR last fell 1 point
in price to yield 1.7333%, from 1.622% late on Monday.
The bond moves come as market participants look toward
Thursday's ECB meeting, which is widely expected to deliver a
cut to interest rates and point to further bond-buying stimulus.
However, concern has been building that ECB policymakers and
other global central banks are reaching the limits of stimulus
policies, especially those with negative interest rates and
sub-zero long-term sovereign bond yields.
"As we wait on news on Thursday morning, it's not surprising
that people have the jitters of what they're going to hear from
the ECB, which has been the focus of attention since the
beginning of August," said Jim Vogel, interest rates strategist
at FTN Financial in Memphis, Tennessee.
The U.S. Federal Reserve is also widely expected to cut
interest rates next week as policymakers attempt to protect the
global economy from risks, such as Britain's exit from the
European Union.
On Wall Street, the S&P 500 staged a late rally to post a
slight gain, but it was capped in part by technology .SPLRCT
shares as data from China showing producer prices decline at
their sharpest pace in three years in August renewed global
recession worries. The climb in yields also weighed on the real
estate sector .SPLRCR , which suffered its biggest percentage
drop in nearly a month. The Dow Jones Industrial Average .DJI rose 73.92 points,
or 0.28%, to 26,909.43, the S&P 500 .SPX gained 0.96 points,
or 0.03%, to 2,979.39 and the Nasdaq Composite .IXIC dropped
3.28 points, or 0.04%, to 8,084.16.
European shares edged higher as the rise in bond yields
helped boost bank shares .SX7P by more than 2%, putting them
on track for a fifth day of gains. The bank index is up nearly
9% over that span, its best five-day performance since April
2017.
The pan-European STOXX 600 index .STOXX rose 0.10%, while
MSCI's gauge of stocks across the globe .MIWD00000PUS was flat
after falling as much as 0.54% during the session.
Germany's DAX rose after Finance Minister Olaf Scholz said
the country was ready to inject "many, many billions of euros"
into the economy to counter any economic downturn. The export-heavy German index was also aided by a Reuters
report that Bank of Japan policymakers are more open to
discussing the possibility of expanding stimulus at their Sept.
18-19 board meeting due to the broadening fallout of the
U.S.-China trade war. In currencies, the dollar strengthened but held in a tight
range ahead of the ECB meeting, while sterling steadied as
investors looked for clarity on the Brexit situation as several
British lawmakers launched a new group on Tuesday to bolster
efforts to secure a deal to leave the European Union.
The dollar index .DXY rose 0.1%, with the euro EUR= down
0.05% to $1.1041.
Sterling GBP= was last trading at $1.2349, up 0.03% on the
day.
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German 30-yr yield https://tmsnrt.rs/2A8XP5y
Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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