GLOBAL MARKETS-Recovery bets support stocks as Fed comes in focus

* U.S. stocks near record on stimulus, vaccine optimism
* Long-term U.S. bond yields near 13-month peak
* Some investors see Fed upbeat on economic outlook
* European shares rise 0.7%; S&P 500 futures up 0.2%
* Global asset performance http://tmsnrt.rs/2yaDPgn

By Danilo Masoni and Hideyuki Sano
MILAN/TOKYO, March 15 (Reuters) - World shares inched higher
while U.S. bond yields hovered near a 13-month peak on Monday on
bets economic growth would accelerate even though investors
became wary of the Federal Reserve and other key central bank
meetings in the days ahead.
The $1.9 trillion stimulus bill President Joe Biden signed
into law last week and the rollout of COVID-19 vaccinations
stoked a bullish mood, but the focus was gradually turning to
the outlook for monetary policy.
"The Federal Reserve is expected to rigidly stick to its
easing plans, despite (Fed Chair Jerome) Powell & Co likely
becoming significantly more upbeat on the outlook," said AFS
analyst Arne Petimezas in Amsterdam.
"However, the risks are towards a hawkish surprise. The $1.9
trillion stimulus has been adopted without much ado and the
Biden administration has now set its sight on a big figure
infrastructure bill," he added.
European shares .STOXX rose 0.7% in morning trading
following gains in Japan .N225 , while S&P 500 futures ESc1
rose 0.2%, just below a record high level touched last week.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.1% by 0847 GMT.
Mainland Chinese shares, however, dropped despite data
showing a quickening in industrial output and a rise in retail
sales, with bluechip CSI 300 index .CSI300 falling 2.2% on
policy tightening worries. Surveillance equipment maker Hikvision 002415.SZ lost 3.2%
after the U.S. Federal Communications Commission designated the
firm, along with four others Chinese companies including Huawei,
as posing a threat to national security. The U.S. House of Representatives gave final approval last
week to the COVID-19 relief bill, giving Biden his first major
victory in office. "This will provide another shot in the arm for a U.S.
economy sprinting out of a deep hole (10 million jobs are still
missing at present)," said Natixis economist Troy Ludtka in New
York.
"We see the macro backdrop - stimulus included - as being
sufficient to jolt the U.S. economy beyond the 6% growth mark,"
he added in a note.
Investors also suspect the $1.9 trillion package, which
amounts to more than 8% of the country's GDP, could stoke
inflation - to the detriment of bonds, especially when their
yields are so low.
Rising inflation expectations could prompt the Federal
Reserve to signal it will start raising rates sooner when it
announces its latest economic projections at the end of Federal
Open Market Committee meeting on Wednesday.
"Following the fiscal stimulus packages it is inevitable
that Fed GDP forecasts will be revised up, and some FOMC members
might think rates will have to move higher sooner than they
anticipated last December," wrote economists at ANZ.
The Bank of England and Bank of Japan also have meetings on
Thursday and Friday this week.
The 10-year U.S. Treasuries yield US10YT=RR stood at
1.619%, having hit 1.642% on Friday, a high last seen in
February last year.
Higher U.S. bond yields saw the dollar rising against other
major currencies. The dollar index =USD rose 0.1%.
The euro slipped 0.2% to $1.1932 EUR= from last week's
high of $1.1990 while the dollar hit a nine-month high of 109.36
against the Japanese yen JPY= .
The British pound slipped 0.3% to $1.3933 GBP=D3 .
Bitcoin BTC=BTSP fell 1.6% from a record high after
Reuters reported that India would propose a law banning
cryptocurrencies. Oil prices rose as data showed China's economic recovery
accelerated at the start of 2021, boosting the energy demand
outlook at the world's largest oil importer.
Brent crude LCOc1 gained 0.8% to $69.76 a barrel, while
U.S. West Texas Intermediate crude CLc1 added 0.8% to $66.14.

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