* Trump says he wants low interest rates
* Dollar "getting too strong"
* China surprises with punchy trade data
By Jamie McGeever
LONDON, April 13 (Reuters) - U.S. Treasury yields tumbled on Thursday and were on track for the biggest weekly decline since late 2015 after U.S. President Donald Trump said he would like to see interest rates stay low, while inflows into bonds drained life from stocks.
The dollar slumped after Trump's remark that it was "getting too strong" and would hurt the U.S. economy, but it later clawed back those declines to snap a three-day losing streak, its longest since January.
The fall in 10-year Treasury yields narrowed the premium over shorter-dated yields. This flattening of the yield curve hurt bank stocks, which were among the biggest fallers on European markets.
U.S. futures pointed to a fall of around 0.3 percent at the open on Wall Street ESc1 as investors digested Trump's apparent reversals on interest rates, Federal Reserve Chair Janet Yellen and China's currency policy.
"Trump now seems to appreciate the Fed's dovish monetary policy stance given additional hikes will serve to boost the dollar," Rabobank strategists wrote in a note on Thursday.
"Trump is most certainly not the first politician to make many promises on the campaign trail only to be forced into an about-face on these promises once in office. Rhetoric and reality are two very different things,"
The benchmark 10-year U.S. Treasury yield slid to a five-month low of 2.22 percent US10YT=RR . It is down 15 basis points this week, marking the sharpest weekly drop since October 2015.
Trump's remarks came in an interview with The Wall Street Journal published late on Wednesday. He also said China was not manipulating its currency - doing so would hurt talks with Beijing on dealing with North Korea - and that he would not rule out re-nominating Yellen once her four-year term is up next year. HIT
Most financial markets will be closed on Friday for the Good Friday holiday, meaning trading volumes on Thursday have been much lighter than usual.
The pan-European index of leading 300 stocks fell 0.5 percent to 1,496 points .FTEU3 , Germany's DAX .GDAXI was down 0.3 percent and Britain's FTSE 100 .FTSE was down 0.6 percent.
European bank stocks were down more than 1 percent .SX7E .SX7P as the flatter yield curve hurt banks' profitability. A 17 percent rise in profit from JP Morgan JPM.N , the biggest U.S. bank by assets, failed to give a meaningful boost to financials or equities more broadly. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose a third of one percent, while the yen's earlier strength helped push Japan's Nikkei .N225 down 0.7 percent.
Surprisingly strong Chinese trade figures and Trump's remarks that the United States will not name China a currency manipulator helped boost Asian stocks.
The dollar index =USD , which tracks the greenback against a basket of six trade-weighted peers, rebounded from an earlier 0.6 percent slide.
It was up 0.1 percent against the yen at 109.10 yen JPY= , after touching a five-month low of 108.70. The euro was down 0.3 percent at $1.0630, after rising as high as $1.0677 EUR= .
The euro and euro zone bond yields were also vulnerable to investor unease about the French presidential election and the victory chances of both far-right leader Marine Le Pen, who has pledged to seek to take France out of the euro, and far-left candidate Jean-Luc Melenchon, who has seen his support climb.
"I think the price action in core yields is mainly shaped by the rising geopolitical concerns but also French election nerves increasing safe-haven flows," said ING strategist Martin Van Vliet.
In commodities, oil prices recovered earlier losses. U.S. crude CLc1 rose 0.2 percent to $53.20 a barrel, and global benchmark Brent LCOc1 was also up 0.2 percent at $55.96.
Gold XAU= pared earlier gains but hovered near a five-month high hit earlier in the session. It was flat on the day at $1,286 an ounce.
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https://t.co/YqIYLIbInP Chinese A-shares vs developed and emerging stocks
http://link.reuters.com/rac25w
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