GLOBAL MARKETS-Stocks climb with bond yields on trade optimism

(Updates to late afternoon, adds commentary)
* Global index rises after U.S. ditches Mexico tariffs
* Mexican peso on track for biggest daily gain since July
2018
* U.S. Treasury yields rise as investors turn to risk assets

By Sinéad Carew
NEW YORK, June 10 (Reuters) - Equities around the world rose
on Monday while U.S. Treasury prices fell as risk assets were in
demand after the United States shelved plans to impose tariffs
on Mexico, easing worries the global economy would face another
trade war.
The U.S. dollar gained against a basket of major currencies
while the Mexican peso was on track for its biggest one-day
percentage gain against the dollar since July 2018. The U.S.-Mexico trade and migration deal also boosted
emerging market stocks and sent U.S. government bond yields
higher as investors favored riskier assets. L2N23H0L8
"There's a nice follow through on last week's optimism that
global growth is likely to continue with trade tensions with
Mexico backing off. There's clearly a growth bias to the tilt of
today's market," said Carol Schleif, deputy chief investment
officer at Abbot Downing in Minneapolis.
U.S. stocks were also boosted by a United Technologies Corp
UTX.N agreement to combine its aerospace business with defense
contractor Raytheon Co RTN.N to create a new company worth
about $121 billion. The Dow Jones Industrial Average .DJI rose 145.54 points,
or 0.56%, to 26,129.48, the S&P 500 .SPX gained 20.54 points,
or 0.71%, to 2,893.88 and the Nasdaq Composite .IXIC added
105.65 points, or 1.36%, to 7,847.75.
The pan-European STOXX 600 index .STOXX rose 0.21% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.67%.
Emerging market stocks rose 1.51%.

MEXICAN PESO GAINS
Benchmark 10-year notes US10YT=RR were last down 17/32 in
price to yield 2.1414%, compared with 2.084% late on Friday.
With the Mexico dispute seemingly resolved, investors will
now focus on whether U.S. President Donald Trump can achieve
agreement with China. Trump said on Monday that he was ready to
impose another round of tariffs on Chinese imports if he does
not reach a trade deal with China's president at a Group of 20
summit later this month. Oil prices edged lower on Monday in volatile trading as
major producers Saudi Arabia and Russia had yet to agree on
extending an output-cutting deal and U.S.-China trade tensions
continued to threaten demand for crude.
Brent crude LCOc1 futures settled down 1.6 percent, or
$1.00, at $62.29 a barrel. U.S. West Texas Intermediate (WTI)
crude CLc1 last traded down 1.3%, or 71 cents, at $53.28 a
barrel. O/R
In currency trading, the dollar index .DXY rose 0.23%,
with the euro EUR= down 0.15% at $1.1314.
The euro pulled back after sources said European Central
Bank policymakers were open to cutting interest rates should
economic growth weaken. The U.S. dollar was down 2.3% against the Mexican Peso,
which was at its highest level since May 31. China's yuan slipped to its weakest this year after the
country's imports fell the most in nearly three years and as
talks to end the Sino-U.S. dispute remained deadlocked.
Spot gold XAU= dropped 1.0% to $1,327.21 an ounce, after
closing at its highest level since February on Friday.