GLOBAL MARKETS-Stocks subdued, U.S. yields fall with Fed on tap

* MSCI world shares index edges down
* Travel, airline shares gain in Europe, US
* 10-yr U.S. bond yields pull back from 13-month peak
* Brent slips from $70 as outlook brightens, inflation
weighs

(Updates with opening of U.S. markets; changes dateline;
previous Milan)
By Lewis Krauskopf
NEW YORK, March 15 (Reuters) - World stock markets were
little changed on Monday and benchmark U.S. bond yields edged
back from 13-month highs as investors looked to the U.S. central
bank's meeting later in the week after the U.S. government
passed a massive coronavirus relief bill.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.01%.
Wall Street's main indexes were mixed in early trade after
the benchmark S&P 500 set record highs last week, while European
shares hit pre-pandemic levels, with travel shares gaining in
both regions.
The Federal Reserve's two-day policy meeting ending on
Wednesday is in focus with rising bond yields and concerns over
a pickup in inflation. Fed policymakers are expected this week
to forecast that the U.S. economy will grow in 2021 at the
fastest rate in decades. "I think there is still a bias toward accelerating economic
growth," said David Joy, chief market strategist at Ameriprise
Financial.
"Beyond that, it's still pretty tentative," Joy said. "It
seems like it is going to be that way until we get to the Fed
meeting on Wednesday and see what they have to say about the
economy."
On Wall Street, the Dow Jones Industrial Average .DJI fell
3.89 points, or 0.01%, to 32,774.75, the S&P 500 .SPX gained
0.09 points, or 0.00%, to 3,943.43 and the Nasdaq Composite
.IXIC added 51.27 points, or 0.38%, to 13,371.14. Airline shares rose as the companies pointed to concrete
signs of an industry recovery as a slowing COVID-19 pandemic
helps leisure bookings. The pan-European STOXX 600 index .STOXX rose 0.12%,
touching its highest level since February 2020, led by travel
stocks .SXTP .
The $1.9 trillion stimulus bill President Joe Biden signed
into law last week, expected improving economic data and the
rollout of COVID-19 vaccinations supported gains, even as
investors were attuned to the outlook for monetary policy.
Longer-term U.S. Treasury yields fell and the yield curve
flattened as the market looked ahead to the Fed meeting and the
latest government debt auctions. Benchmark 10-year notes US10YT=RR last rose 6/32 in price
to yield 1.6161%, from 1.635% late on Friday.
Rising inflation expectations could prompt the Federal Open
Market Committee to signal it will start raising rates sooner
than expected.
"Following the fiscal stimulus packages it is inevitable
that Fed GDP forecasts will be revised up, and some FOMC members
might think rates will have to move higher sooner than they
anticipated last December," economists at ANZ said.
In currencies trading, the dollar index =USD rose 0.153%,
with the euro EUR= down 0.2% to $1.1931.
Oil prices slipped after Brent hit $70 a barrel as data
showed an accelerating economic recovery in China, which was
offset by fears of inflation. U.S. crude CLc1 recently fell 1.51% to $64.62 per barrel
and Brent LCOc1 was at $68.24, down 1.42% on the day.

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