GLOBAL MARKETS-Stocks dip as report China wants more trade talks tempers optimism

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* China wants more talks before signing initial trade deal -

* China trade data add to signs of weakness in economy

* Asian stocks gain, European shares fall

* Wall Street futures down 0.4%

By Ritvik Carvalho

LONDON, Oct 14 (Reuters) - A global index of stock markets

dipped on Monday as a report that China wants more talks before

signing a "Phase One" trade deal with the United States tempered

an initial burst of optimism that followed signs of progress

last week.

Stock markets in Asia cheered U.S. President Donald Trump's

outlining the first phase of an agreement to end a trade war

with China and suspending a threatened tariff hike But data showing a further contraction in Chinese imports

and exports in September and a Bloomberg report

that China wants further talks with the U.S. before signing

Trump's Phase One deal hit risk sentiment in Europe.

The pan-European STOXX 600 index .STOXX was down nearly 1%

by midday in London. Germany's DAX .GDAXI , dominated by

companies exposed to China, slipped 0.7%. All European country

indexes were in the red. .EU

MSCI's All-Country World Index .MIWD00000PUS , which tracks

shares across 47 countries, was down 0.1% on the day.

The emerging trade deal, covering agriculture, currency and

some aspects of intellectual-property protection, would

represent the biggest step by the two countries in 15 months.

But investors advised caution.

"While a positive development, we are not absolutely certain

that this marks the start of a clear de-escalation of the trade

dispute," said Mark Haefele, chief investment officer at UBS

Global Wealth Management. A number of issues were unresolved or

unclear, in his view.

"A delay to the scheduled December tariffs was not

announced, although that's likely if a deal is reached, and the

state of provisions on intellectual property, forced technology

transfer, and Chinese state subsidies, the most difficult

aspects of the negotiations, are still unclear."

Liquidity was also lacking with Japan off and a partial

market holiday in the United States for Columbus Day.

Australia's main index gained 0.54% .AXJO and South Korea

.KS11 rose 1.11%. Shanghai blue chips .CSI300 added 1%.

E-Mini futures for the S&P 500 ESc1 were down 0.2% after

rising on Friday.

The drag from the trade war was a major reason Singapore's

central bank eased monetary policy on Monday for the first time

in three years. Data showed the city-state's economy had only

narrowly dodged recession. WEEK FOR BREXIT

The progress on trade was still enough to hit safe-haven bonds.

Yields on U.S. 10-year Treasury notes rose to 1.7530%

US10YT=RR .

The yield curve also steepened as short-term rates were held

down by news the Federal Reserve would start buying about $60

billion per month in Treasury bills to ensure "ample reserves"

in the banking system. The fading rally in risk assets as European markets opened

saw the Japanese yen regain ground against the dollar. The

currency was 0.3% higher to the dollar at 108.03 JPY= .

The dollar .DXY gained 0.15% against a basket of

currencies.

Sterling fell over half a percent to $1.2550 GBP= ,

retreating from a 15-week high of $1.2708 on Friday on optimism

Britain could reach a deal on Brexit with the European Union.

A Brexit deal was hanging in the balance on Monday after

diplomats indicated the EU wanted more concessions from Prime

Minister Boris Johnson and that a full agreement was unlikely

this week. Spot gold gained 0.4%, last trading at $1,494.68 per ounce

XAU= .

Oil prices fell more than 2%. O/R Brent crude LCOc1

futures fell 2.23% to $59.16 a barrel. U.S. crude CLc1 lost

2.23% to $53.48 a barrel.