GLOBAL MARKETS-Commodities rally, stocks steady, yields off highs

(Adds details, updates prices)
* World stocks steady near 2-week low
* Crude oil, metal prices rise on growth outlook
* Expectations of faster growth spur inflation fears
* Eyes on Fed's Powell testimony at 1500 GMT
* Global asset performance:http://tmsnrt.rs/2yaDPgn

By Danilo Masoni and Anshuman Daga
MILAN/SINGAPORE, Feb 23 (Reuters) - Optimism about the
economic outlook pushed commodity prices to new highs on
Tuesday, helping stocks steady as expectations of a dovish
testimony by Federal Reserve Chairman Jerome Powell calmed down
bond yields.
The MSCI world equity benchmark .MIWD00000PUS was flat
near two week lows by 0919 GMT, helped by gains in
commodity-heavy equity indexes in Asia and a rally in European
travel stocks on the prospect of easing social restrictions.
British Prime Minister Boris Johnson set out a phased plan
on Monday to end a COVID-19 lockdown in the world's sixth
largest economy. World stocks had been weighed down in recent sessions by a
rapid surge in global bond yields which fuelled expectations
that central banks could eventually turn less accommodative in a
bid to tame inflation. Tech stocks were among the hardest hit.
But the sell-off in the bond market eased after European
Central Bank chief Christine Lagarde said on Monday the central
bank was "closely monitoring" rising borrowing costs.
Investors now expect Fed's Powell to be equally reassuring
when he testifies before Congress at 1500 GMT.
"If there were already any expectations that Powell could
try to calm down rates, then (Lagarde's remarks) have just
further cemented them," said Giuseppe Sersale, strategist and
fund manager at Anthilia in Milan.
Tech stocks and rate-sensitive sectors like utilities in
Europe however fell, offsetting stronger travel and commodity
stocks and pushing down the regional benchmark
.STOXX by 0.6%.
In Asia, the rally in commodities lifted Australia's S&P/ASX
200 .AXJO 0.9%, while tech-laden South Korea's Kospi .KS11
lost 0.3%. Japanese markets were shut for a public holiday.
Nasdaq futures ESc1 were down 0.6% at three-week lows
after high-growth stocks such as Apple AAPL.O , Microsoft
MSFT.O and Tesla TSLA.O dragged the index down 2.5% on
Monday, while S&P 500 ESc1 futures inched 0.1% lower.
Bond yields have risen sharply this month as prospects of
more U.S. fiscal stimulus boosted hopes for a faster economic
recovery globally. However, that is also fuelling inflation
worries, prompting investors to sell growth stocks that have
rallied in recent months.
"Real U.S. interest rates are now in positive territory,
which has created some concern around the consequences for
equities markets," Cesar Perez Ruiz, chief investment officer at
Pictet Wealth Management said in a report.
U.S. 10-year Treasury yields US10YT=RR edged up to 1.374%
but remained below the one-year high of 1.394% hit on Monday.
Germany's 10-year Bund yields DE10YT=RR also rose to
-0.309% but were below the 8-month high of -0.278% hit in the
previous session.
Commodity prices strengthened again.
Oil prices jumped by more than $1, underpinned by optimism
over COVID-19 vaccine rollouts and lower output as U.S. supplies
were slow to return after a deep freeze in Texas shut in crude
production last week. ID:nL1N2KT03M
Brent crude LCOc1 was last up 0.9% at $66.18 a barrel
after earlier hitting a fresh 13-month high of $66.79, while
U.S. crude CLc1 rose 1.2% to $62.45 a barrel.
"Oil has been caught up in the broader commodities move
higher, with a weaker USD proving constructive for the complex,"
ING strategists led by Warren Patterson said in a note.
"Meanwhile, there is also a growing view that the oil market
is looking increasingly tight over the remainder of the year".
Copper prices meanwhile hit a 9-1/2-year high as tight
supply and solid demand from top consumer China boosted
sentiment. ID:nL1N2KT0BC
In currency markets, the dollar briefly dropped to its
lowest since Jan. 13 ahead of Powell's testimony, while
commodity-linked currencies hovered near multi-year highs.
The dollar index =USD was up 0.1% at 90.143, with the euro
EUR= flat at $1.2151.

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World FX rates YTD http://tmsnrt.rs/2egbfVh
Global asset performance http://tmsnrt.rs/2yaDPgn
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