GLOBAL MARKETS-Stimulus hopes support stocks, ease pressure on bonds

* Stocks gain as risk appetite returns
* China central bank rate reforms, Germany stimulus report
help
* Euro zone bond yields rise off record lows
* Gold down 1%
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Wilson
LONDON, Aug 19 (Reuters) - Global equity markets rose on
Monday on signs that major economies would look to prop up
stalling growth with fresh stimulus measures, easing pressure on
bonds and dampening demand for perceived safe-havens such as
gold.
Hopes of government action to stave off fears of recession -
triggered by an inversion in the U.S. bond yield curve - grew as
China's central bank unveiled interest rate reforms expected to
lower corporate borrowing costs.
The prospect of Germany's coalition government ditching its
balanced budget rule to take on new debt and launch stimulus
steps also helped the mood, after boosting Wall Street shares on
Friday. Berlin could make available up to 50 billion euros ($55
billion) of extra spending, Finance Minister Olaf Scholz said on
Sunday, adding that Germany has the fiscal strength to counter
any future economic crisis "with full force". MSCI's world equity index .MIWD00000PUS , which follows
shares in 47 countries, gained 0.3%, powered by a 0.8% gain for
the Euro STOXX 600 .STOXX . Bourses in London .FTSE ,
Frankfurt .GDAX and Paris FCHI rose between 0.7%-0.9%.
The optimism was set to spread to Wall Street, too, where
futures gauges EScv1 NQcv1 were pointing to gains of between
0.9%-1%.
Earlier in the day, the People's Bank of China's interest
rate reforms - which it is said would help steer borrowing costs
lower for companies and support a slowing economy - helped
stocks in Shanghai .SSEC rise 2.1%. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained 1.1%.
Yet even as signs that major economies would act to support
growth emboldened investors, some market players cautioned that
the boost to markets from expectations of stimulus was fragile.
"You have just got a little bit of portfolio readjustment, a
resetting of expectations. The big question is whether it can
last," said Michael Hewson, chief market strategist at CMC
Markets. "Talking about fiscal stimulus in Germany is one thing,
doing it is something else."
As investors tiptoed back to riskier assets, gold XAU=
fell 1% to $1,499.30 per ounce, with U.S. futures for the
precious metal GCcv1 also down.
The Japanese yen JPY=EBS was steady.
The dollar index .DXY, , which measures the greenback
against six major currencies, was marginally higher in Asia at
98.201, close to a two-week high reached on Friday.
Investors are focused on the annual meeting of central
bankers in Jackson Hole, Wyoming, where U.S. Federal Reserve
Chairman Jerome Powell will speak at the symposium on Friday.
Analysts think Powell's remarks will be aimed at reassuring
nervous markets that the Fed will keep its easing stance and set
the stage for more rate cuts.
"What Powell has to say is in focus as the discrepancy
remains between what he said on interest rates and what the
markets have come to expect the Fed will do," said Junichi
Ishikawa, senior FX strategist at IG Securities in Tokyo.
The shift towards appetite for riskier assets played out in
bond markets, too.
Benchmark government debt in the euro zone rose off record
lows, with Germany's 10-year bond yield steady at -0.69%
DE10YT=RR . Its 30-year bond yields also gained.
The 10-year U.S. Treasury yield US10YT=RR stood at 1.526%,
having pulled away from a three-year trough marked last week as
fears of a global slowdown panicked markets.
In commodity markets, crude oil prices rose after an attack
on a Saudi oil facility by Yemeni separatists on Saturday, with
traders also looking for signs that Sino-U.S. trade tensions
could ease.
Brent crude LCOc1 was up 65 cents, or about 1.1%, at
$59.29 a barrel at 0805 GMT.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/