GLOBAL MARKETS-U.S. bond yields ease from 14-month highs, oil steadies

* U.S. 10-year yields at 1.68%, near 14-month high
* Oil prices flat after huge Thursday fall
* Nasdaq futures up 0.65% after sharp Thursday drop

By Carolyn Cohn
LONDON, March 19 (Reuters) - U.S. bond yields on Friday
eased from the 14-month highs reached the day before as markets
looked to a U.S. economic recovery, while oil prices steadied
after a slide.
Bond markets have experienced sharp moves this week with the
U.S. Federal Reserve saying it expects higher economic growth
and inflation in the United States this year, although it
repeated its pledge to keep its target interest rate near zero.
"Every man and his dog is looking at bond yields," said
Giles Coghlan, chief currency analyst at HYCM. "Even though (Fed
chair Jerome) Powell was dovish, bond yields marched higher,
purely on anticipation that the Fed is behind the curve - the
market is pricing rate hikes in."
Yields on U.S. 10-year notes, which move inversely to prices
and have been rising for the past seven weeks on growth
expectations, spiked to their highest since January 2020 at
1.754% US10YT=RR on Thursday. They eased to 1.6838% on Friday.
German long-dated government bond yields dipped in tandem
with U.S. yields. DE30YT=RR
But SEB analysts said they expected the U.S. 10-year
Treasury yield to hit 2% this year, "potentially already by the
summer...propelled by the strong U.S. recovery outlook aided by
new stimulus checks and a fast increase in the U.S. CPI
(consumer price inflation)".
Nasdaq futures NQc1 rose 0.65% and S&P 500 futures ESc1
gained 0.2%.
Oil prices and the Nasdaq fell 7% and 3% respectively on
Thursday on worries over faltering vaccine roll-outs and further
slowdowns in Europe. France imposed a one-month lockdown in
Paris and parts of the north. French stocks .FCHI fell 0.65% on Friday, while UK stocks
.FTSE were 1% lower as energy stocks dropped.
MSCI world stocks .MIWD00000PUS fell 0.27% from one-month
highs in the previous session
Brent crude futures LCOc1 ticked up four cents to $63.33 a
barrel. U.S. crude CLc1 rose 19 cents to $60.19. O/R
Oil's retreat on Thursday wiped out four weeks of gains in a
single session amid worries world demand would fall short of
high expectations.
The euro EUR= weakened 0.14% to $1.1897. The dollar edged
up 0.1% to 91.909 against a basket of currencies and was steady
against the yen at 108.82 JPY= .
Markets were unsettled by the Bank of Japan's (BOJ) decision
to slightly widen the target band for 10-year yields and tweak
its buying of assets.
The bank portrayed the changes as a "nimble" way to make
easing more sustainable, though investors seemed to take it as a
step back from all-out stimulus. A decision to confine purchases
to only TOPIX-linked ETFs knocked the Nikkei .N225 down 1.4%.
Chinese blue chips .CSI300 shed 2.6%, as the first
high-level U.S.-China meeting of the Biden administration got
off to a fiery start. The rise in bond yields has weighed on gold, which offers no
fixed return, leaving it down 0.2% at $1,740 an ounce XAU= .

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