* 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
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. 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. 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. 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. 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. pan-European STOXX 600 index .STOXX rose 1.67%, its best day since January. 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. U.S. 10-year notes US10YT=RR last rose 8/32 in price to yield 2.0578%, from 2.086% late on Monday. 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. prices rose sharply after Trump confirmed his meeting with Xi. crude CLcv1 settled up 3.8% at $53.90 a barrel, while Brent LCOcv1 settled at $62.14 a barrel, up 2%.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 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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