GLOBAL MARKETS-World stocks sink as tariff deadline approaches

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Markets wary of Dec. 15 tariff deadline
* European stocks down for second day
* German ZEW sentiment higher than expected
* Fed, ECB meetings eyed

By Ritvik Carvalho
LONDON, Dec 10 (Reuters) - Global stock markets fell for a
second day on Tuesday, as caution over a Dec. 15 deadline for
the next round of U.S. tariffs on Chinese imports weakened risk
appetite and limited outsized market moves.
Following their counterparts in Asia, European shares fell
for a second day, with the pan-European STOXX 600 index .STOXX
down 1.09% at 1206 GMT. Germany's DAX .GDAXI fell 1.44% to its
lowest in a week. .EU
The MSCI All-Country World Index .MIWD00000PUS , which
tracks shares across 47 countries, was down 0.2%. U.S. stocks
futures were down about 0.3%. NQc1 ESc1 .N
Market uncertainty before the tariff deadline was reinforced
by comments from U.S. Agriculture Secretary Sonny Perdue on
Monday, who said President Donald Trump did not want to
implement tariffs but did want to see "movement" from China.
The deadline looms over a series of events this week, with
markets also awaiting the UK election on Thursday and U.S. and
European Central Bank meetings.
Euro zone government bond yields were mostly steady,
refusing to budge from recent ranges. Germany's benchmark Bund
yield inched up to -0.29% DE10YT=RR , moving in a three-basis-
point-range.
Italian 10-year bond yields, which fell on Monday, were flat
on the day at 1.39% IT10YT=RR . GVD/EUR
In the euro zone, Christine Lagarde holds her first meeting
and news conference as ECB chief on Thursday. "Expectations for policy action from the ECB and Fed are
subdued," said Commerzbank rates strategist Rainer Guntermann.
"Lagarde's communication style will be watched closely, but
that's unlikely to lead to any repricing in bond markets."
Germany's ZEW research institute said its monthly index on
economic morale among investors rose to 10.7 from -2.1 a month
earlier, much higher than forecast by economists. The reading pushed up a market gauge of euro zone inflation
expectations EUIL5YF5Y=R to its highest in a month and boosted
the euro, which last traded 0.15% higher at $1.1082. EUR=
On Tuesday, the U.S. two-year yield, a sign of market
expectations of Fed fund rates, was at 1.619%, down from its
close of 1.627% on Monday. The 10-year Treasury yield
US10YT=RR was at 1.8138% from a U.S. close of 1.8225% on
Monday.
With investors reluctant to make big bets, MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was
0.25% lower. China's benchmark Shanghai Composite index .SSEC
was higher by 0.1%.
New data in China showed producer prices fell in November
but consumer prices spiked, complicating efforts to boost demand
as economic growth slows. Australian shares .AXJO were down 0.34%. Japan's Nikkei
.N225 fell 0.08%.
Tepid trade followed weakness on Wall Street overnight. The
Dow Jones Industrial Average .DJI fell 0.38% to 27,909.6, the
S&P 500 .SPX lost 0.32% to 3,135.96 and the Nasdaq Composite
.IXIC dropped 0.4% to 8,621.83. Investors were also keeping an eye on the U.S. Federal
Reserve. The Fed is expected to leave rates unchanged at its
two-day policy meeting, which ends Wednesday. Analysts say
investors will be watching policymakers' forecasts for future
U.S. economic growth. Investors have focused this year on the risks of the UK
crashing out of the European Union without a deal and a sharp
escalation in trade war tensions, said Frank Benzimra, head of
equity strategy at Societe Generale.
"What you have seen since the end of the third quarter and
the beginning of the fourth quarter was these two risks were
receding ... And now this week you see those two concerns coming
back on the market," he said, adding that he expected their
effect would be short-term.
Sterling, which reached its highest against the dollar since
April on Monday at $1.3180, added 0.3%, last changing hands at
$1.3169. GBP= GBP/
Expectations of a Conservative Party victory in Thursday's
UK election have powered a rally in the pound, but options
markets indicate worries of a post-election retreat.
The dollar index .DXY , which tracks the U.S. currency
against a basket of six other major currencies, was down 0.14%
at 97.506.
Worries over trade continued to push oil prices lower. Data
released on Sunday showed that Chinese exports declined for a
fourth straight month, underscoring the impact of the trade war
between the U.S. and China, which is in its 17th month.
Global benchmark Brent crude LCOc1 fell 0.54% to $63.90 a
barrel and U.S. West Texas Intermediate crude CLc1 dipped
0.54% to $58.7 a barrel. O/R
Gold rose XAU= 0.4% to $1,467.31 per ounce. GOL/