GLOBAL MARKETS-Stocks and bonds yields climb as investors eye U.S. stimulus

* Global stocks tick up on U.S. stimulus hopes
* Wall Street futures point to 0.3% gain
* European stocks slip, tempering gains
* U.S. Treasury yields hit 4-month high
* Chinese yuan climbs, up 4.5% this year
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Tom Wilson
LONDON, Oct 21 (Reuters) - Global stocks and bond yields
rose on Wednesday as Washington moved closer to agreeing a
coronavirus stimulus package, pinning the dollar at its lowest
for a month.
The MSCI world equity index .MIWD00000PUS , which follows
shares in nearly 50 countries, gained 0.1%, buoyed by a 0.5%
gain for Asia-Pacific shares outside Japan .MIAPJ0000PUS .
Wall Street was also set for gains, with U.S. stock futures
EScv1 up 0.3%.
European shares were however dragged down by the healthcare
.SXDP and real estate .SX86P sectors. The broad Euro STOXX
600 .STOXX fell 0.2% in early trading, with Paris .FCHI and
London .FTSE shares down 0.2% and 0.4% respectively.
The White House and Democrats in the U.S. Congress moved
closer to agreement on a new coronavirus relief package as
President Donald Trump said he was willing to accept a large aid
bill despite opposition from his own Republican Party.
With just two weeks until the U.S. presidential election,
Trump signaled a willingness to go along with more than $2.2
trillion in new COVID-19 relief, a figure Democrats have been
pushing for months. In response, U.S. Treasury yields hit a four-month high and
the yield curve steepened as expectations grew for more fiscal
spending. Investors also sold benchmark euro zone debt, with
German Bunds DE10YT=RR rising to their highest for a week at
-0.571%.
The moves in stocks and bonds highlight how importantly new
stimulus is viewed for the U.S. and global economies, said Hugh
Gimber, global market strategist at J.P. Morgan Asset
Management.
"Everyone knows that more stimulus needs to come through,"
he said, cautioning that any package may struggle to pass the
Republican-controlled Senate. "But markets are perhaps not
always right to be bouncing on speculation."
Still, bond investors are pricing in a stimulus package,
either by the election or early next year should the Democrats
win the White House and Senate, Deutsche Bank analysts wrote.
The chances of such a "Blue Wave" have risen notably in the
last 3 weeks, they said.

DOLLAR DOWN, YUAN UP
The dollar hit a one-month low against a basket of
currencies =USD as optimism over a pre-election U.S. stimulus
package bought riskier currencies.
The greenback was last down 0.2% at 92.849, with the doubts
over whether any package can pass the Republican-controlled
Senate kept the dollar from breaching last month's two-month
lows.
Underlying the potential for the Senate to dash investors'
hopes for more stimulus, a senior Senate Republican aide told
Reuters that majority leader Mitch McConnell has privately told
his fellow Republicans that he did not favour a deal before the
Nov. 3 elections.
Still, underscoring appetite for risk among currency
traders, the Chinese yuan hit a more than-two year top as the
world's No.2 economy rebounds strongly from the pandemic,
dragging riskier Asian currencies along with it.
The yuan CNY= was up 0.4% at 6.6480, taking gains against
the dollar this year to around 4.5%. Its rise helped lift the
Australian dollar AUD= , weighed down by expectations of a rate
cut in November, from Tuesday's three-week low.
Alternative assets also fared well. Bitcoin BTC=BTSP ,
which is often sought during periods of appetite for risk,
climbed nearly 3% to break $12,000 for the first time since
August and was not far off its highest this year.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/

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