GLOBAL MARKETS-Global stocks, oil edge away from highs as stimulus rally ebbs

* MSCI World down 0.1%, pressured by firmer bond yields
* Oil, gold also lower; dollar firms
* Biden signs $1.9 tln stimulus into law

By Simon Jessop and Andrew Galbraith
LONDON/SHANGHAI, March 12 (Reuters) - Global shares were
flat on Friday but within sight of a record high while oil edged
lower as benchmark debt yields climbed, helping to curb the
latest stimulus-driven rally.
Gains in Asian stock markets proved tough to match for most
of European peers, after they hit a 1-year high in the prior
session. U.S. stock futures also suggested a lower start for
Wall Street later in the day.
The note of caution followed the signing of a $1.9 trillion
U.S. stimulus bill into law on Thursday and a further dovish
tilt from the European Central Bank that had prompted a retreat
in bond yields and eased global concerns about rising inflation.
The burst of market optimism from those events had helped
Asian shares rise - Japan's Nikkei added 1.7% - but this faded
out as Europe opened for business, with Britain's FTSE 100
.FTSE and the STOXX Europe 600 .STOXX down around 0.5%.
That in turn weighed on the MSCI World Index
.MIWD00000PUS , taking it into the red, down 0.1%, albeit less
than 1.5% away from the record high hit last month.
Biden had signed the stimulus legislation ahead of a
televised address in which he pledged aggressive action to speed
vaccinations and move the country closer to normality by July 4.
The signing of the American Rescue Plan provided a further
boost to market sentiment after the European Central Bank said
it was ready to accelerate money-printing to keep a lid on
borrowing costs, using its 1.85 trillion euro Pandemic Emergency
Purchase Program more generously over the coming months to stop
any unwarranted rise in debt financing costs.
Against that backdrop of super-loose monetary policy,
analysts largely expect inflation to pick up as vaccine rollouts
lead to a reopening, leading to worries that Biden's stimulus
package could overheat the economy. U.S. 10-year Treasury yields US10YT=RR rose again on
Friday, back above 1.6% and on track to rise for the seventh
straight week.
In currency markets, the dollar gained 0.56% against the yen
JPY= and 0.4% against the euro EUR= and pound GBP= ,
although the latter was helped by news the economy had
contracted less than expected in January.
The dollar index =USD , meanwhile, which tracks the U.S.
currency against a basket of six major rivals, rose 0.4%.
Markets will likely remain volatile in the second quarter,
particularly for the dollar, which was much stronger than
expectations at the start of the year, said Cliff Zhao, chief
strategist at China Construction Bank International.
"So I think the strong U.S. dollar may weigh on some
liquidity conditions in the emerging markets," he added.
Oil prices retreated from sharp gains as the dollar firmed,
with U.S. crude CLc1 dipping 0.3% to $65.8 a barrel. Brent
crude LCOc1 lost 0.1% to $69.54 per barrel.
Spot gold prices XAU= fell 0.8% to $1,707.7 an ounce.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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