GLOBAL MARKETS-Stocks lifted by hopes for monetary policy, U.S.-China trade

* Stimulus hints from ECB President Draghi shake markets
* Bond yields slump, German yields hit fresh record low
* U.S., China confirm Trump-Xi G20 meeting
* MSCI global stocks index jumps 1%
* Oil prices climb on U.S.-China trade hopes

(Updates with close of U.S. markets)
By Lewis Krauskopf
NEW YORK, June 18 (Reuters) - Global stocks rallied on
Tuesday and benchmark government bond yields tumbled after
European Central Bank President Mario Draghi hinted at economic
stimulus, with equities getting an extra boost from confirmation
that U.S. President Donald Trump would meet China's president to
talk about trade.
The euro also weakened after Draghi said the ECB will ease
policy again if inflation fails to accelerate, signaling one of
the biggest policy reversals of his eight-year tenure.
Draghi's comments spurred talk that the Federal Reserve
would also soon start easing monetary policy by cutting interest
rates, with the U.S. central bank set to give its policy
statement on Wednesday.
"In the U.S., it got translated into, 'Oh great, this means
the Fed will have to cut,'" said Carol Schleif, deputy chief
investment officer with Abbot Downing in Minneapolis. "But we
don't necessarily think they have to or should this soon."
The Fed is expected to leave borrowing costs unchanged at
its meeting this week but possibly lay the groundwork for a rate
cut later this year. Trump has sought to influence the Fed to cut rates. In
response to Draghi's comments, Trump on Tuesday accused the ECB
president of trying to weaken the euro to gain an unfair
competitive advantage. Trump also said he would have an extended meeting with
Chinese President Xi Jinping at the G20 summit later this month,
as the world's two largest economies rekindle trade talks.
China, which previously declined to say whether the two leaders
would meet, confirmed the get-together. "There had been some question in markets in the last few
days about whether or not that meeting was actually going to
happen," Schleif said. "It still remains to be seen what comes
out of that meeting."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.04%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
353.01 points, or 1.35%, to 26,465.54, the S&P 500 .SPX gained
28.08 points, or 0.97%, to 2,917.75 and the Nasdaq Composite
.IXIC added 108.86 points, or 1.39%, to 7,953.88. The pan-European STOXX 600 index .STOXX rose 1.67%, its
best day since January. Benchmark bond yields fell globally following Draghi's hints
of more stimulus, with German bond yields DE10YT=RR hitting
record lows deep in negative territory, around -0.32%, and
French 10-year yields FR10YT=RR turning negative for the first
time. Benchmark U.S. 10-year notes US10YT=RR last rose 8/32 in
price to yield 2.0578%, from 2.086% late on Monday. "Draghi was extremely dovish and this had a big impact on
Treasuries as we anticipate the Federal Reserve," said Ellis
Phifer, market strategist at Raymond James in Memphis,
Tennessee.
The dollar index .DXY , which measures the greenback
against a basket of currencies, rose 0.06%, with the euro EUR=
down 0.18% to $1.1197. Oil prices rose sharply after Trump confirmed his meeting
with Xi. U.S. crude CLcv1 settled up 3.8% at $53.90 a barrel, while
Brent LCOcv1 settled at $62.14 a barrel, up 2%.

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Draghi sends Bund yield to new record low https://tmsnrt.rs/2XXH7Rc
U.S. interest rates https://tmsnrt.rs/2Iogak7
GRAPHIC-Global assets in 2019 http://tmsnrt.rs/2jvdmXl
GRAPHIC-World FX rates in 2019 http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
GRAPHIC-China trade shock interactive https://tmsnrt.rs/2SRopIf
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