* European shares nudge higher after Asia brushes 4-month low
* Weak market sentiment supports dollar
* 10-yr German bond yield edges up from record low
* Copper set for worst month since 2015
* U.S. Q1 GDP figures revised fractionally lower
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* European stock futures modestly higher in early trade
By Marc Jones
LONDON, May 30 (Reuters) - Markets saw a modest rebound in risk appetite on Thursday, as traders took a break from selling beaten-down stocks and pumping money into safe-haven bonds and the dollar.
The end the most turbulent month of the year so far was approaching and, amid fierce U.S-China trade tensions, investors seemed content to square up positions.
Wall Street futures were up despite a minor downward tweak to U.S. Q1 GDP figures, European stocks nudged 0.2%-0.5% higher having lost a third of the 15% gain they had been carrying into May, and the major currencies barely budged.
Over in the red-hot bond markets, German Bund yields climbed for the first time in four days having hit record lows and Treasury yields were higher too having also slumped on increasing expectations that U.S. interest rate cuts are coming. GVD/EUR
Money markets are now pricing in roughly two U.S. rate cuts by the start of next year and the European Central Bank is set to turn on its money taps again next month as trade worries weigh on the global economy.
"We oppose a trade war but are not afraid of a trade war," Chinese Vice Foreign Minister Zhang Hanhui said on Thursday in Beijing, when asked about the tensions with the United States.
"This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying." comments followed reports from Chinese newspapers that Beijing could use rare earths to strike back at Washington after U.S. President Donald Trump remarked he was "not yet ready" to make a deal with China over trade. contrast to the rebound in Europe .EU and in Wall Street futures .N , the tense mood had seen the Shanghai Composite Index .SSEC fall 0.7% overnight, tech stocks sink 1.4% and Hong Kong's Hang Seng .HSI lose 0.4%.
Japan's Nikkei .N225 went down 0.5% too and Australian stocks .AXJO shed 0.85% as miners there mourned what is set to be the worst month for copper prices /MCU3=LX since 2016. They have plunged more than 9%. China's resource hungry economy is the biggest buyer of copper. MET/L
"Negotiations appear to have halted and although there has been nothing specific to suggest that there won't be further discussions, the recent actions from the Chinese indicate everything is moving in the wrong direction," said Capital Economics analyst Ross Strachan.
GREENBACK ME UP
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had slipped to a fresh four-month low before finding a bit of traction to edge up 0.1% into the close.
"The equity markets are in the midst of pricing in a long-term trade war, with participants shaping their portfolios in anticipation of a protracted conflict," said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management.
"The upcoming G20 summit could provide the markets with relief, as the United States and China could use the event to begin negotiating again over trade," he added, referring to the June 28-29 gathering of leaders in Japan.
Notwithstanding the fractional tick-up in Treasury yields, the dollar index against a basket of six major currencies .DXY was steady at 98.113 and in reach of a two-year peak of 98.371 set last week.
The greenback was little changed at 109.650 yen JPY= after bouncing back from a two-week low of 109.150 and the euro pottered around $1.1130 EUR= all session following three successive days of losses. /FRX
"The strength in the dollar is surprising given that markets are now expecting multiple rate cuts by 2020," Commerzbank (DE:CBKG) FX strategist Ulrich Leuchtmann said.
Oil prices moved sideways after an industry report showed a decline in U.S. crude inventories that exceeded analyst expectations. O/R
That followed volatile trading on Wednesday, when oil prices fell to near three-month lows at one point as trade war fears gripped the commodity markets.
U.S. crude futures CLc1 were up 0.25% at $58.96 per barrel after brushing $56.88 the previous day, their lowest since March 12. Brent crude LCOc1 was in and out the red and last at $69.13 per barrel.
Trade worries have weighed on oil but supply constraints linked to the Organization of the Petroleum Exporting Countries' output cuts and political tensions in the Middle East have offered some support.