* World stocks reach highest since early December
* Oil prices hit five-month high, lift sentiment
* ECB on hold, but Draghi not so dovish?
* Commodities broadly higher, Bund yields at one-month high
* Russian shares climb to record highs
(Writes through, adds ECB reaction)
By Dhara Ranasinghe and Jamie McGeever
LONDON, April 21 (Reuters) - The euro and euro zone bond
yields jumped on Thursday after European Central Bank president
Mario Draghi said the bank's policies were working, the economic
recovery was continuing and inflation would pick up eventually.
The euro flirted with $1.14 and Germany's 10-year yield hit
its highest in over a month as investors interpreted Draghi's
comments to reporters after the bank left policy unchanged as
slightly less dovish than expected.
The rise in the euro and bond yields led the region's stocks
to extend their losses, with the FTSEuroFirst 300 index of
leading shares down around 1 percent.
U.S. stock futures pointed to a slightly lower open on Wall
Street ESc1 .
"There was some limited expectation of a further move on
asset purchases and interest rates. But there were no further
measures and they did not discuss 'helicopter money'," said Neil
Jones, head of FX hedge fund sales at Mizuho in London.
"He's basically saying there will be no more action, for now
at least."
The euro rose as high as $1.1394 EUR= , up almost 1 percent
on the day and bouncing back sharply from an earlier low of
$1.1283.
German 10-year Bund yields DE10YT=TWEB rose above 0.24
percent for the first time in a over month, supported by an
earlier jump in oil prices.
The FTSEurofirst 300 index earlier touched its highest level
since early January before falling.
"We've had a great run-up in the last few weeks and we're
now just starting to pause for a bit," said Terry Torrison,
managing director at Monaco-based McLaren Securities.
World stock markets hit their highest level in almost five
months before easing back .MIWD00000PUS .
OIL SURGE
But Draghi also left the door open to further easing, adding
that the ECB would act to ward off any unnecessary tightening in
financial conditions, a possible reference to the higher euro.
The tone in markets remained generally upbeat. Oil prices
LCOc1 rose to a five-month high as the International Energy
Agency said that 2016 would see the biggest drop in non-OPEC
production in a generation.
U.S. and Brent crude futures CLc1 LCOc1 have gained
around 70 percent since the lows reached in January and
February. Both benchmarks were last down around 0.5 percent,
however, at $43.95 and $45.60 a barrel, respectively.
"It looks like the trough in oil is now behind us," said
Chris Scicluna, head of economic research at Daiwa Capital
Markets.
Oil's rally resonated across world markets, with emerging
market stocks rising to 5 1/2-month highs and Russian shares
racing to record highs
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS rose 0.8 percent, brushing against
its highest since early November. Japan's Nikkei .N225 gained
2.6 percent and the MSCI world equity index .MIWD00000PUS rose
to its highest level since December.
Commodity-linked currencies held firm. The Australian dollar
AUD=D4 was at $0.7813, after rising to an 11-month high of a
$0.7830 on Wednesday.
The Swedish crown gained to its highest level against the
euro EURSEK= since March 2015 after the Riksbank kept its key
interest rate unchanged at -0.5 percent, as expected, and
extended its bond-buying programme.