* European shares climb after Asia sinks into the red
* Bond yields fall globally, Bunds at new low
* UK bond yields, pound under pressure on BoE remarks
* Euro zone and UK PMI data weak
* https://tmsnrt.rs/2zpUAr4
By Marc Jones
LONDON, July 3 (Reuters) - Action on world markets focused
on bonds on Wednesday, with a fresh slide in benchmark debt
yields on simmering global trade war and recession fears,
central bank easing bets and ebbing oil prices.
EU leaders' nomination of IMF chief Christine Lagarde as
Mario Draghi's replacement at the helm of the European Central
Bank reinforced expectations of monetary policy easing in the
bloc.
Traders greeted the decision by sinking German 10-year Bund
yields to record lows of minus 39 basis points first thing and
Italian two-year yields back into negative territory for first
time in over a year.
The ten-year UK gilts yield fell 4 basis points to 0.687
GB10YT=RR . The yield is below the BoE's main policy rate for
the first time in a decade.
"We have already seen some weak data in recent weeks so that
is the backdrop (for the plunge in bond yields)," said Head of
Macro Strategy at Rabobank Elwin de Groot.
"And now have Christine Lagarde as the likely successor of
Mr Draghi at the ECB, which for the market says that the dovish
policies will continue."
European shares took little notice of some sizeable
overnight falls for Asia's big bourses to push 0.6% higher.
Gains were however led by an unusual pairing of traditionally
defensive healthcare stocks and carmakers, which jumped 1.2%.
.EU
There was plenty of data to digest too. Euro area business
activity picked up slightly last month, figures showed, but it
remained weak as a modest upturn in the services industry offset
a continued deep downturn in factory output.
Worryingly, forward-looking indicators did not point to a
bounce back, and other data showed Britain's economy appeared to
have contracted in the second quarter against a backdrop of
Brexit and global trade worries.
"The latest downturn has followed a gradual deterioration in
demand over the past year as Brexit-related uncertainty has
increasingly exacerbated the impact of a broader global economic
slowdown," Chris Williamson, chief business economist at IHS
Markit, said of the UK reading.
CROWN ON TOP
In the currency markets, the pound flirted with two-week
lows after the PMI data and stood at $1.2568 GBP=D4 , on course
for its fifth drop in the last six sessions.
The euro was steadier at $1.1282 EUR= while the dollar
traded down at 107.70 yen JPY= , off Monday's high of 108.535
hit after the weekend agreement between the United States and
China to resume trade talks.
Sweden's crown meanwhile hit a 2-1/2 month high of 10.4890
versus the euro after the Riksbank bucked the global trend back
towards cutting interest rates and said it remained on track to
raise its by early 2020, albeit with some caveats. /FRX
Oil prices also rose a touch after data showed U.S. crude
inventories fell more than expected last week but remained
wobbly after a more than 4% dive on Tuesday, even after OPEC and
allies including Russia agreed to extend supply cuts.
O/R
Brent crude LCOc1 futures traded at $62.85 per barrel, up
0.7%, while U.S. West Texas Intermediate (WTI) crude CLc1
futures rose 0.6% to %56.56 a barrel, following a 4.8% drop the
previous day.
Safe-haven gold XAU= was back on the rise too, up 0.5% at
$1,425.64 per ounce having reached as high as $1,435.99. GOL/