GLOBAL MARKETS-Stocks rally on hopes from trade, monetary policy

* ECB president Draghi hints at stimulus
* Bond yields slump, German yields hit fresh record low
* Trump says will meet with China's Xi, trade talks set to
restart
* MSCI global stocks index jumps, Wall St up over 1%
* Oil prices surge in wake of Trump's China comments

(Updates with open of U.S. markets; changes dateline, previous
London)
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, while equities got an extra boost when U.S. President
Donald Trump confirmed a meeting with China's president amid the
countries' trade dispute.
The euro also slid after Draghi said the region's central
bank will ease policy again if inflation fails to accelerate,
signaling one of the biggest policy reversals of his eight-year
tenure. Draghi's comments fed beliefs that the Federal Reserve would
also soon start easing monetary policy, with the U.S. central
bank set to give its policy statement on Wednesday.
“It's our view that the markets have been ahead of the
central banks globally in signaling that there is a global
economic slowdown underway, and that monetary policy in light of
the current conditions are probably too tight and central banks
need to reverse course, especially the Federal Reserve,” said
Brad Peterson, regional portfolio advisor at Northern Trust
Wealth Management in Chicago.
"We are getting confirmation of that in Europe and expect
the same out of the Fed here this week," Peterson said.
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. Separately, Trump said he would meet with Chinese President
Xi Jinping at the G20 summit later this month, and that trade
talks between the two countries were set to restart ahead of
time. MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.16%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
340.73 points, or 1.3%, to 26,453.26, the S&P 500 .SPX gained
35.95 points, or 1.24%, to 2,925.62 and the Nasdaq Composite
.IXIC added 148.39 points, or 1.89%, to 7,993.41. The pan-European STOXX 600 index .STOXX rose 1.70%, set
for 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 6/32 in
price to yield 2.0647%, from 2.086% late on Monday.
"We're not that far from a 'whatever it takes' moment in the
sense that the key message was they will do whatever it takes to
avoid a worsening of macro conditions by year-end," said Didier
Borowski, head of global macroeconomic research at Amundi.
The dollar index .DXY , which measures the greenback
against a basket of currencies, rose 0.18%, with the euro EUR=
down 0.29% to $1.1184. Oil prices rose sharply after Trump confirmed his meeting
with Xi. U.S. crude CLcv1 rose 3.14% to $53.56 per barrel and Brent
LCOcv1 was last at $62.05, up 1.82% on the day.

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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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